Asia Morning Briefing: What’s the Real Use for a Yen Stablecoin? An On-Chain Carry Trade

The Korean won and the Taiwan dollar can’t really leave their shores, bound by local rules born in the aftermath of the 1997 financial crisis that keep them home.

Japan’s yen, by contrast, flows freely. That convertibility makes it the perfect candidate for a stablecoin that brings Japan’s low-rate liquidity into DeFi, where traders can chase higher yields in dollar-linked assets.

With the launch of JPYC’s yen-backed stablecoin this week, Japan has created Asia’s first truly global fiat-pegged token, one that can circulate offshore thanks to the yen’s full convertibility.

Its arrival could transform Japan’s low-rate liquidity into a new funding source for decentralized finance, letting traders borrow cheap digital yen and chase higher yields in dollar-linked assets.

In doing so, the yen carry trade, a fixture of global markets for decades, now has a programmable, blockchain-based twin that links DeFi yields directly to Bank of Japan policy.

The launch comes as the Bank of Japan keeps rates anchored at 0.5%, its highest level since 2008, but still far below global peers.

Policymakers remain divided over when to raise again, with hawks pushing for a 0.75% move as early as year-end and doves urging patience amid uncertainty from US tariffs and domestic wage growth. That low-rate environment, even in a tightening cycle, leaves the yen among the cheapest funding currencies in the world.

Even if the BOJ raises rates, on-chain yields still dwarf anything available in Japan’s money markets.

(DeFiLlama)

Platforms like Maple, Lista, and Stream Finance are posting annual returns between 6% and 14%, far above Japan’s sub-1% benchmark. A trader borrowing digital yen at even 0.75% would still find ample spread by swapping into dollar-denominated assets or depositing into DeFi pools like USDC Syrup or BNSOL.

But this is all hypothetical. Right now, JPYC limits redemptions to $6500 a day (¥1 million) – not exactly an amount that can move markets.

Perhaps this is a reminder that even digital money can’t fully escape Japan’s cautious financial architecture.

Tokyo’s sense of restraint remains baked into the code, and while the on-chain carry trade may be new, Japan’s careful hand on the throttle is not.

Market Movements:BTC: Bitcoin traded at $110,432, down 1.6% over the past 24 hours, as US investor demand continued to cool after September’s surge. CryptoQuant data shows spot ETF outflows averaging 281 BTC over the past week and a fading Coinbase premium, suggesting profit-taking and waning domestic appetite following the $126K rally.

ETH: Ether hovered near $3,914, off 1.5%, mirroring Bitcoin’s slowdown. ETF inflows have nearly stalled since mid-August, and CME’s six-month basis has slipped to 3%, pointing to reduced leveraged exposure and cautious positioning ahead of key US macro data.

Golden: Gold traded around $4,020 per ounce, steady after this week’s volatility, as traders balanced safe-haven demand with easing inflation expectations and a firmer dollar.

Nikkei 225: Asia-Pacific markets were mixed Thursday after the Fed’s 25-basis-point rate cut, as Chair Jerome Powell warned a December move wasn’t guaranteed and investors awaited the Trump-Xi meeting and details of Seoul’s new US trade deal.

Elsewhere in Crypto:

• DRW Leads Talks to Raise $500 Million for Canton Token Treasury (Bloomberg)
• Solana event in China cut short as Beijing’s stablecoin warning sparks unease (SCMP)
• Kraken Top Crypto Exchange in EU Lobbying Spending Ahead of Coinbase (Decrypt)