Catenaa, Tuesday, January 06, 2026- Japan and South Korea emerged in 2025 as the leading Asian markets pushing local currency stablecoins, as regulators, banks and crypto firms sought alternatives to US dollar dominance in on-chain finance.
Across Asia, policymakers spent the year laying foundations for stablecoins backed by domestic currencies, even as dollar-pegged tokens such as USDT and USDC continued to control most market liquidity.
The shift reflects efforts to align digital assets with local monetary systems and prepare for more activity moving on-chain.
Japan took a central role after fintech firm JPYC launched what it described as the country’s first legally recognized yen-backed stablecoin in October.
The country’s three megabanks, MUFG, SMBC and Mizuho, also began pilot programs covering payments, interbank settlement and institutional use.
In December, Japan’s Financial Services Agency confirmed support for the joint stablecoin initiative.
Large financial groups also moved into the sector. SBI Holdings announced plans to work with blockchain firm Startale on stablecoin issuance and related infrastructure.
South Korea saw similar momentum. In September, crypto custody firm BDACS launched KRW1, a won-pegged stablecoin built on Avalanche for remittances and payments.
Another won-backed token, KRWQ, debuted on Coinbase’s Base network in October.
KakaoBank advanced its own won stablecoin project into active development.
Regulatory attention increased in both countries. Japan tightened oversight while supporting experimentation, while South Korean authorities signaled work toward a formal framework.
Despite the activity, non-dollar stablecoins remain small. Dollar-backed tokens account for more than 97% of the $312 billion stablecoin market, with yen-pegged assets totaling about $16 million.
