Stablecoins in Asia: Japan, Singapore & the SBI Connection

Japan and Singapore wrote stablecoin rules before the US or EU did, and both are now on their second iteration: Japan has its first licensed yen stablecoin in circulation and USDC distributed by a licensed intermediary, while Singapore's regulator opened a consultation on September 1, 2026, to turn its 2023 framework into statute. Running through both is SBI Group — Japan's largest online financial conglomerate, Circle's joint-venture partner, and one of Arc's eleven founding validators. This page covers both regimes as they stand, with dates and sources.

Last reviewed: September 2026 · Next review by: December 30, 2026. This page describes what the rules do; it is not legal, tax, or financial advice. Both regimes are actively changing — confirm current status with local counsel before acting.

How does Japan regulate stablecoins?

Through the Payment Services Act, amended effective June 1, 2023, which defines fiat-backed stablecoins as "electronic payment instruments." Only banks, trust companies and licensed funds-transfer providers may issue them; firms that distribute or handle them register as electronic payment instrument service providers. It is a permissioned regime by design — the question in Japan is never "is this stablecoin legal" but "who is licensed to issue or intermediate it."

The first answers arrived in 2025. SBI VC Trade registered as an intermediary on March 4, 2025 and began distributing USDC on March 26, 2025 — the first fully compliant dollar stablecoin distribution in Japan — with Binance Japan, bitbank and bitFlyer committing to list. JPYC, a yen stablecoin, received its funds-transfer registration on August 18, 2025 and began issuance on October 27, 2025; by August 2026 it had issued a cumulative ¥2.83 billion across Kaia, Polygon, Ethereum and Avalanche — modest, and a genuine first. Meanwhile Japan's broader crypto framework is moving: legislation reported enacted in July 2026 shifts crypto assets from the Payment Services Act into the Financial Instruments and Exchange Act from fiscal 2027, with a flat 20% tax on licensed-exchange trades from January 2028 and a path to spot ETFs — while stablecoins explicitly remain under the Payment Services Act. Confirm the enactment details against the Financial Services Agency's own publications before relying on dates.

What is the SBI connection?

Deep, and directly relevant to Arc. SBI Holdings and Circle formed a joint venture, Circle SBI Japan KK, in March 2025 to expand USDC access in Japan, alongside Circle's own Japanese entity. SBI invested US$50 million in Circle at its June 2025 IPO. SBI VC Trade is the licensed distributor that brought USDC to Japanese users. And SBI Group is one of Arc's eleven founding validators (who they are) — the Asian anchor in a cohort otherwise dominated by American and European institutions, and the reason Arc's signaled regional stablecoins name the yen among them. Japan's card network JCB also announced work combining Circle's infrastructure with its merchant network in the second quarter of 2026. For a business, the takeaway is that Japan's stablecoin rails run through licensed intermediaries with real institutional backing — slower to open than a permissionless market, sturdier once open.

How does Singapore regulate stablecoins?

Under the Monetary Authority of Singapore's single-currency stablecoin framework, finalized August 15, 2023: stablecoins pegged to the Singapore dollar or a G10 currency, issued in Singapore, may be labeled "MAS-regulated" if they meet reserve, redemption (five business days), capital and disclosure requirements. Circle Singapore holds a Major Payment Institution license (PS20200630, granted 2023). StraitsX obtained its licenses and launched XUSD in July 2024 alongside its XSGD, aligned to the framework with DBS custody; Paxos Digital Singapore launched USDG in November 2024. Singapore also tightened its perimeter: since June 30, 2025, Singapore-based firms serving only overseas clients must be licensed under the Financial Services and Markets Act, and MAS said it would generally not grant such licenses — the end of Singapore as a nominal base for offshore crypto businesses.

The framework is now becoming law. On September 1, 2026, MAS opened consultation P015-2026 on amendments to the Payment Services Act that would legislate the stablecoin regime: 100% reserve backing, redemption at par within five business days, a prohibition on paying interest to holders, capital requirements (the higher of S$1 million or 50% of annual operating expenses), limited recognition of foreign stablecoins from "comparable" regimes, and joint foreign–Singapore issuance for wholesale use. The consultation closes October 16, 2026. Read MAS's own paper before citing specifics; the consultation is days old at this writing.

What does this mean for a business operating in Asia?

Three practical readings. Licensing is the gate in both markets — you transact through licensed intermediaries (SBI VC Trade and its peers in Japan; MPI holders in Singapore), and stablecoins outside those channels sit outside the protections. Dollar and local currency coexist by design — USDC is licensed alongside JPYC in Japan and alongside XSGD in Singapore, which is the structure Arc's StableFX engine is built to serve (Arc's design) and the context for yen and other regional stablecoins signaled on Arc's roadmap. And the trajectory is convergent — Japan, Singapore, the EU (MiCA) and the UK (the UK regime) have all landed on full reserves, par redemption and no interest to holders, which makes a compliant stablecoin increasingly the same product everywhere, differing mainly in who may issue and intermediate it (corporate USDC operations).

FAQ

Is USDC legal in Japan? Yes — distributed since March 26, 2025 by SBI VC Trade, a licensed electronic payment instrument service provider, with other licensed exchanges listing it. Japan's regime permits stablecoins through licensed intermediaries only.

Is there a yen stablecoin? JPYC, licensed August 2025 and issuing since October 2025, with about ¥2.83 billion cumulative by August 2026 — small, but Japan's first fully licensed yen stablecoin.

What is Singapore's stablecoin framework? MAS's 2023 single-currency stablecoin framework — full reserves, five-day redemption, capital and disclosure rules — now being legislated via a consultation opened September 1, 2026 (closes October 16, 2026).

Can a Singapore-licensed stablecoin pay interest? Under the proposed legislation, no — interest to holders would be prohibited, consistent with the EU and UK approaches.

Why does SBI matter for Arc? SBI Group is a founding Arc validator, Circle's Japanese joint-venture partner, and the group whose licensed exchange brought USDC to Japan — the institutional link between Arc and Asia's most developed stablecoin regime.