South Korea and Japan are playing catch-up in the stablecoins game in the face of a US-dominated global stablecoin market worth around $255 billion.
But next year will see stablecoin issuance properly take flight in Japan, with adoption following suit, say industry insiders.
“The issuance of approved and licensed yen-denominated stablecoins will increase fivefold by the end of 2026,” Kyle Ellicott, executive director at the blockchain firm Stacks Asia Foundation, told DL News. “The market’s volumes will surpass $50 million, driven by the first Japanese yen stablecoin’s early 2025 traction.”
While Japanese regulators have already approved yen-backed tokens, South Korea’s president Lee Jae-myung is determined not to lag behind, placing won stablecoin adoption at the center of his economic plans.
With both countries hoping to make 2026 a stablecoin-powered success, what do experts think of their chances?
Japan: No retail focus
Stablecoin issuers are set to become major buyers of Japanese government bonds and influence the Bank of Japan’s control over monetary policy, said the head of JPYC, two weeks after issuing an eponymous stablecoin.
The launch was a major milestone: the first yen-pegged token to be issued on Japanese soil.
The government and business leaders alike think that stablecoins will help Japan do better and more effective trade with other advanced economies. And that is why some of the country’s wealthiest companies are looking to get in on the act in 2026.
In November, the country’s top regulator, the Financial Services Agency, or FSA, gave its blessing to a stablecoin issuance pilot spearheaded by Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking, and Mizuho Bank, three of Japan’s biggest lenders.
Sota Watanabe, founder of the blockchain developer Astar Network and the CEO of the web3 solutions provider Startale Group, told DL News that stablecoins “complement Japan’s existing financial infrastructure and support greater connectivity with global markets.”
“Japan now has a clear regulatory framework that allows compliant stablecoins to operate at scale,” Watanabe said. “We’re going to see new players enter this space very soon.”
However, some warn that those expecting fireworks in the Japanese stablecoin sector next year are set for disappointment.
Sangmin Seo, CEO of the blockchain developer Kaia, told DL News that while Japan has a clear legal foundation for stablecoin issuance, implementation is “deliberately conservative.”
“Japan is embracing stablecoins through a highly controlled, institution-driven model,” Seo said. “Early use cases have focused on interbank settlement, corporate payments, and infrastructure efficiency, rather than immediate retail adoption.”
Seoul’s sticking point
In South Korea, the picture is very different.
Talk of conservative approaches is nowhere to be found in the business world, as advocates speak of a retail-powered model that could see K-pop fans all over the world snapping up concert tickets and merch using tokens issued by the tech giants Kakao and Naver.
“For stablecoin issuance, 2026 could be a big year,” Bok Jin-sol, the lead researcher at the crypto research firm Four Pillars, told DL News.
The government is raring to go, championing various lawmakers’ stablecoin bills in a bid to end the total ban on crypto issuance put into place in early 2018. Once the bills start to progress through the National Assembly, banks and other companies are reportedly ready to spring into action with stablecoin issuance roadmaps.
Not so fast, says the Bank of Korea.
The central bank has expressed grave concerns about Lee’s stablecoin plans, issuing a 100+ page report detailing its worries. Top Lee allies have dismissed the bank’s report as “scare stories.”
But there seems to be no easy way out of the impasse. “Even after the bill passes, there’s a good chance the Bank of Korea will take charge of license reviews for issuers,” Bok said. “If that happens, both issuance and adoption could face delays.”
Bok predicted that the South Korean stablecoin market will eventually “consolidate around two or three major issuers.”
Chasing USDT success
Try as East Asia’s financial powerhouses might, Bok said that the likelihood of a South Korean USDT or USD Coin competitor emerging is remote.
“The South Korean won simply doesn’t have the same level of global demand as the dollar,” Bok said. “The country’s foreign exchange regulations are also strict enough to cause issues with global and on-chain markets. That said, you can’t ignore the size of the domestic market. If won stablecoins gain strong retail adoption domestically, their potential impact could be significant.”
Seo was more upbeat, however. “I think we could see the first credible South Korean and Japanese equivalents of USDT or USDC appear in 2026,” he said. “But they’ll look very different from the US versions.”
As both Seoul and Tokyo insist on a regulation-before-issuance approach, all South Korean and Japanese stablecoins “will be highly supervised, institutionally backed, and much closer to digital bank money than a crypto-native token like USDT,” Seo said.
Some, however, argue that regulators will not have the final say on the success or otherwise of East Asian stablecoin plans.
Arie Trouw, co-founder of the blockchain developer XYO, told DL News that the question of whether 2026 becomes a breakout year for yen and won-denominated stablecoins depends less on regulation and more on how well coins integrate with existing financial systems.
“If issuers focus on deep liquidity, transparent reserves, and predictable integrations across consumer and institutional platforms, then 2026 could be an inflection point,” said Trouw.
“Coins must become easy to move, easy to redeem, and integrated into platforms that people already use. Without that, you’ll see issuance grow without the kind of real adoption USDT or USD Coin enjoy.”
The stablecoin stakes are high for Japan and South Korea, tech powerhouses that are not used to trailing so far behind the US on IT-related matters. With so much ground to make up, the task ahead for both countries appears formidable.
Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
