This article explores the growing significance of stablecoins—cryptocurrencies pegged to fiat currencies like the U.S. dollar or Japanese yen—in both the United States and Japan. While adoption in the U.S. has surged, with new legislation like the GENIUS Act supporting the ecosystem, Japan has taken a regulatory leadership role, having first defined crypto assets in 2017. The article reviews Japan’s legal framework under the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA), recent amendments, and the emergence of local stablecoin initiatives. It also highlights future prospects for stablecoin-based payments.

Japan has played a pioneering role in regulating cryptocurrencies and stablecoins. While stablecoins like USDT and USDC reach over $235 billion globally, Japan is still in early adoption stages. The country first legally defined crypto assets in 2017 under the Payment Services Act (PSA). A 2023 amendment introduced the first stablecoin regulations, marking a key milestone. Alongside, the Financial Instruments and Exchange Act (FIEA) governs security tokens and blockchain-based financial products. With cashless payments now at 42.8%, experts see stablecoins as the next step in Japan’s digital payment evolution, supported by progressive legal and technological frameworks.