Special Encore: How Japan’s Stablecoin Could Reshape Global Finance

Summary

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Episode Overview

Podcast: Thoughts on the Market
Episode: Special Encore: How Japan’s Stablecoin Could Reshape Global Finance
Date: November 28, 2025

Main Theme:
This episode features Miya Nagasaka, head of Japan Financials Research at Morgan Stanley MUFG Securities, discussing the imminent launch of Japan’s first yen-denominated stablecoin and its potential to redefine digital payments, both domestically and globally. The conversation explores why stablecoins matter, Japan’s unique regulatory approach, and the broader implications for global finance and central bank digital currencies.

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Key Discussion Points & Insights

1. Japan’s Entry Into the Stablecoin Market ([00:29])

• While later to the crypto market than some, Japan’s forthcoming yen-denominated stablecoin could have far-reaching effects on digital money movement.

• Quote [00:29]:
  "Japan may be late to the crypto market, but its first yen denominated stablecoin is just around the corner, and it has the potential to quietly reshape how digital money moves across the country and globally." — Miya Nagasaka

• Stablecoins differ from volatile cryptocurrencies like Bitcoin by being pegged to stable assets (yen, US dollar, etc.).

2. Japan’s Regulatory Framework ([01:02])

• In June 2023, Japan reformed its Payment Service Acts to provide a legal framework for stablecoins.

• New regulations require that stablecoins be:

  • 100% backed by high-quality liquid assets (not algorithmic)
  • Issued by licensed entities with transparency and monthly audits
  • Prohibited from being algorithmic in design (mirroring similar global rules in the US, EU, and Hong Kong)

• Quote [01:21]:
  "Stablecoins promise to make payments faster, cheaper and available 24/7." — Miya Nagasaka

3. Digital Economy Momentum ([01:21]-[01:53])

• Cashless payments in Japan are rising (30% in 2020 to 43% in 2024), but adoption lags behind some countries, leaving potential for growth.
• Government and fintech industry are driving digital payment adoption.
• Stablecoins seen as the “missing link” to a truly digital economy, combining reliability of cash with Internet speed.

4. Industry Applications and Opportunities ([01:53]-[02:53])

• Financial institutions are exploring stablecoins for:

  • Instant settlement of stock and bond trades (moving from days to seconds)
  • Asset management and lending innovations
  • Web3 integration and “banking as a service”

• Regulatory compliance and Japan’s low interest rate environment pose profitability challenges.

• Quote [02:56]:
  "These transactions could happen in seconds with stablecoins..."

5. Impact on Cross-Border Payments ([02:53]-[03:21])

• Stablecoins can supplement, but not replace, SWIFT in global transactions—potentially cutting fees by up to 80% and completing payments in seconds.

• Critical role of trust in issuers and anti-money laundering compliance.

• Quote [03:10]:
  "Stablecoins will not replace Swift, but they can supplement it. Payment that used to take days can now be completed in seconds with up to 80% lower fees."

6. The Role of CBDCs ([03:21]-[04:00])

• Comparison between stablecoins and central bank digital currencies (CBDCs):

  • Stablecoins: private, not legal tender, drive innovation
  • CBDCs: government-issued, legal tender, act as infrastructure

• Japan is preparing for a CBDC but proceeds cautiously.

• Future may see stablecoins and CBDCs “coexisting”—each serving distinct roles in digital finance.

• Quote [03:48]:
  "If and when that happens, stablecoins and CBDCs can coexist with the digital currency serving as public infrastructure and stablecoins driving innovation."

7. The Bottom Line ([04:00]-[04:15])

• Japan’s stablecoin initiative could impact payments, asset management, and global finance well beyond its borders.
• The “stablecoin journey is just beginning,” but its ripples are already evident.

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Notable Quotes & Memorable Moments

• Miya Nagasaka [00:29]:
  "Japan may be late to the crypto market, but its first yen denominated stablecoin is just around the corner, and it has the potential to quietly reshape how digital money moves across the country and globally."
• [01:21]:
  "Stablecoins promise to make payments faster, cheaper and available 24/7."
• [02:56]:
  "These transactions could happen in seconds with stablecoins..."
• [03:10]:
  "Payments that used to take days can now be completed in seconds with up to 80% lower fees."
• [03:48]:
  "If and when that happens, stablecoins and CBDCs can coexist with the digital currency serving as public infrastructure and stablecoins driving innovation."

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Key Segment Timestamps

• [00:29] Introduction to Japan’s entry into stablecoins
• [01:02] Regulatory framework and reforms
• [01:21]-[01:53] Cashless payment adoption and role of stablecoins
• [01:53]-[02:53] Industry applications and innovations
• [02:53]-[03:21] Cross-border payments and the role of SWIFT
• [03:21]-[04:00] Stablecoins vs. CBDCs and Japan’s cautious approach
• [04:00]-[04:15] Overall impact and summary

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Summary

Miya Nagasaka details how Japan’s upcoming yen-based stablecoin—supported by robust regulatory standards—could transform not only the Japanese payment and financial landscape but also have a ripple effect on global finance. The blend of strict oversight, mounting digital adoption, and the coexistence of private and public digital currencies makes Japan’s approach one to watch for investors and policymakers alike.

Transcript

[A]

In case you missed it today, we're bringing you a special encore release of a recent episode. We'll be back on Monday with a brand new episode.

[B]

Welcome to Thoughts on the Market. I'm Miya Nagasaka, head of Japan Financials Research at Morgan Stanley MEFG securities. Today, Japan's stablecoin revolution and why it matters to global investors It's Friday, October 31st at 4pm in Tokyo.

[C]

Japan may be late to the crypto market, but its first yen denominated stablecoin is just around the corner, and it has the potential to quietly reshape how digital money moves across the country and globally. You may have heard of digital money like bitcoin, it's significantly more volatile than traditional financial assets like stocks and bonds. Stablecoins are different. They are digital currency designed to maintain a stable value by being pegged to assets such as the yen or US dollar.

[B]

And in June 2023, Japan amended its Payment Service Acts to create a legal.

[C]

Framework for stablecoins market.

[B]

Participants in Japan and abroad are watching closely whether the Japan yen stablecoin can establish itself as a major global digital currency such as tether.

[C]

Stablecoins promise to make payments faster, cheaper and available. 247 Japan's cashless payment ratio jumped from about 30% in 2020 to 43% in 2024, and there's still room to grow compared to other countries. The government's push for fintech and digital payment is accelerating, and stablecoins could be the missing link to a truly digital economy. Unlike Bitcoin or other cryptocurrencies, stablecoins are designed to suppress price volatility. They're managed by private companies and backed by assets. Think cash, government bonds or even commodities like gold. Industry watchers think stablecoins can make digital payments as reliable as cash. But with the speed and flexibility of the Internet, Japan's regulatory approach is strict. Stablecoins must be 100% backed by high quality liquid assets, and algorithmic stablecoins are prohibited. Issuers must meet transparency and reserve requirements, and monthly audits are standard. This is similar to new rules in the U.S. eU and Hong Kong. What does this mean? In practice, financial institutions are exploring stablecoins for instant payments, asset management and lending. For example, real time settlement of stock.

[B]

And bonds trades normally take days.

[C]

These transactions could happen in seconds with stablecoins, they also enable new business models like banking as a service and Web3 integration, although regulatory costs and low interest rates remain hurdles for profitability. Or think about swift transactions, the backbone of international payments. Stablecoins will not replace Swift, but they can supplement it. Payment that used to take days can now be completed in seconds with up to 80% lower fees. But trust in issuers in compliance with anti money laundering rules are critical. There's another topic on top of investors minds CBDCs, the central bank digital currencies. Both stablecoins and CBDCs are digital, but digital currencies are issued by central banks and considered legal tender, whereas stablecoins are private sector innovations. Japan is the world's fourth largest economy and considered a leader in technology, but it takes a cautious approach to financial transformation. It is preparing for a CBDC but hasn't committed to launching one yet. If and when that happens, stablecoins and CBDCs can coexist with the digital currency serving as public infrastructure and stablecoins driving innovation. So what's the bottom line? Japan's stablecoin journey is just the beginning, but its impact could ripple across payments, asset management and even global finance. Thanks for listening. If you enjoy the show, please leave us A review wherever you listen and share thoughts on the market with a friend or colleague today.

[D]

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