Why yen stablecoins are key to Japan’s crypto ambitions
Japan’s regulators and conglomerates are working to bring one of the world’s key funding currencies into DeFi, but retail activity remains muted.
Japan is preparing its financial system for a world of stablecoins and tokenized assets, with banks, regulators and financial conglomerates working to bring the yen economy onchain.
The country is the world’s fourth-largest economy, and its yen is one of the most important currencies in global finance. According to the International Monetary Fund, the yen accounted for 5.82% of global foreign exchange reserves, ranking third worldwide.
A major reason for the yen’s systemic importance is the carry trade. Due to low interest rates, investors borrow cheap yen, convert it into other currencies and invest in higher-yield assets, making the yen one of the most trusted funding currencies for global markets.
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