Key facts
- SBI Holdings is investing a portion of its JPYSC stablecoin reserves in Japanese government bonds.
- This investment is enabled by new Japanese regulations effective June 1, 2026, allowing trust-backed stablecoins to hold up to 50% of reserves in short-term government bonds.
- SBI Shinsei Trust Bank has invested 1 billion yen in short-term Japanese government bonds as backing for JPYSC.
- The JPYSC stablecoin ecosystem has a total outstanding balance of nearly 27 billion yen.
- The move occurs amid indications of softening demand in the Japanese government bond market and speculation about potential Bank of Japan rate hikes.
Ripple partner SBI Holdings has begun investing a portion of its yen-pegged stablecoin, JPYSC, reserves into Japanese government bonds. This strategic shift is facilitated by SBI Shinsei Trust Bank and marks JPYSC as the first trust-based yen stablecoin in Japan to adhere to new reserve regulations that took effect on June 1, 2026.
The revised Payment Services Act permits eligible trust-backed stablecoins to allocate up to 50 percent of their reserves into short-term government bonds or time deposits, provided regulatory requirements are met. SBI Shinsei Trust Bank has already invested 1 billion yen in short-term Japanese government bonds as backing assets for JPYSC, which has a current supply of approximately 20.1 billion yen. The broader JPYSC ecosystem, including lending services from SBI VC Trade, boasts a total outstanding balance close to 27 billion yen.
This move by SBI comes at a time when the Japanese government bond market is experiencing softer demand, evidenced by a recent auction for five-year bonds receiving less interest than in previous periods, with its bid/cover ratio declining. Concurrently, the Japanese yen has appreciated significantly against the U.S. dollar, reaching its highest level since February and fueling concerns about imported inflation. These economic pressures are increasing speculation that the Bank of Japan may face pressure to raise interest rates, which typically leads to higher yields and lower bond values.
SBI's strategy involves holding short-term government securities as part of its reserve management policy for JPYSC, aiming to maintain liquidity for redemptions and invest the reserve pool in highly-rated yen-denominated assets. Beyond bond investments, SBI anticipates JPYSC will support future use cases such as on-chain payments, foreign exchange transactions, and the settlement of tokenized real-world assets.