Tokyo offers subsidies for yen stablecoin projects

The Tokyo metropolitan government will offer subsidies of up to 40 million yen per company to businesses that integrate yen-pegged stablecoins into their operations, aiming to support the development of a yen-based digital economy and new payment infrastructure.

The city’s Bureau of Industrial and Labor Affairs said the program supports initiatives that use actually issued stablecoins, comply with the Payment Services Act and other relevant laws, and can be implemented or verified by the end of the fiscal year in which the grant decision is made. Previously, Japan’s finance minister Satsuki Katayama said 2026 would be the year of digital assets.

Eligible expenses include fees for external infrastructure to process digital yen payments, costs for expert consultations and audits, and system development work. The subsidy cap of about 40 million yen is roughly $250,000 and is intended to offset early-stage development and testing costs.

Applications are open to companies that use yen-pegged stablecoins as part of their business model. The city expects the funding to help firms build and test payment systems and user-facing services that run on issued stablecoins.

The announcement arrives while dollar-pegged stablecoins continue to lead global market capitalization and other fiat-pegged tokens gain attention. Japan’s regulatory regime for stablecoins is among the strictest, and the country’s first yen-pegged stablecoin launched in October.

Under current rules, international and domestic stablecoin issuers are subject to the same user protection and anti-money-laundering standards. The city said those rules limit the penetration of dollar-based tokens in Japan and create room for locally issued yen tokens.

The subsidy program requires compliance with the Payment Services Act and other laws and funds projects that can be evaluated within the fiscal year, a condition intended to speed proofs of concept and practical deployment.

The city said the subsidies aim to address local payment needs, improve the convenience of payments and remittances, and promote a yen-denominated digital economic zone. Officials expressed confidence that yen-denominated stablecoins could become a major means of payment in the international community.