JPYC: Price Volatility Eliminated for Payment Infrastructure Through Legal Frameworks; Progress Toward Practical Use in Disaster Relief

The misconception that "stablecoins are also a type of crypto asset" is still widespread on the internet, but this is a lie that significantly contradicts both reality and legal classification. It is no different from influential figures and network marketers spreading conspiracy theories that stablecoins are a type of crypto asset.

Treating crypto assets like Bitcoin, which are traded for speculative purposes and experience intense daily price fluctuations, in the same category as stablecoins, which are designed on the premise of value stability, is a mistaken perception that ignores the fundamental mechanisms of both.

First, what must be understood is that stablecoins are by no means "financial products for profiting from price fluctuations." Their essence lies in being a pure payment infrastructure that allows for instantaneous movement in digital space while maintaining a value pegged equivalently to the Japanese yen, a legal tender.

The classification of "Electronic Payment Instruments" clearly defined by Japanese law

The most clear indication of this difference is the revised Payment Services Act that came into effect in June 2023. Through this legal amendment, Japan has taken the lead globally in legally organizing stablecoins backed by legal tender as "Electronic Payment Instruments," completely distinct from conventional crypto assets. In other words, yen-denominated stablecoins—specifically, fiat-collateralized stablecoins like JPYC and JPYSC—are legally operated in a category different from Bitcoin ($BTC) or Ethereum ($ETH) even under the law.

This is not merely a matter of terminology; it means that the frameworks for user protection and business regulation are designed separately. Issuing companies of stablecoins are subject to asset management obligations on par with banks and trust companies, and it is legally mandated that backing assets be strictly segregated and held.

The "stable value" that demonstrates its true worth in daily payments and disaster relief

Based on this legal backing, the value that stablecoins actually provide is extremely practical. With assets like Bitcoin, where the price can fluctuate by several percent or, in some cases, tens of percent overnight, it is virtually impossible to use them for daily shopping or remittances.

For example, when buying vegetables at a greengrocer, if the yen-equivalent amount changes between the time of payment and the time the settlement is completed, the sales price and the paid amount will not be the same, causing the commercial transaction to fail.

Furthermore, if we consider the case of sending relief funds to disaster-stricken areas, if there is a possibility that the value will decrease while the funds are being sent, it leaves anxiety as a means of reliably delivering support. This is something that cannot be avoided with crypto assets.

However, because stablecoins always maintain an equivalence of [1 coin = 1 yen], all such concerns disappear. Supporters can send the necessary amount with peace of mind, and the disaster victims can grasp the exact value the moment they receive it. Currently, the industry as a whole is steadily and swiftly moving forward with efforts to contribute to disaster relief, reconstruction support, and the resumption of local economies, exploring whether yen-denominated stablecoins can be utilized for relief in the Kumamoto earthquake.

Misleading online discourse and the reality we must correctly understand

Nevertheless, posts on social media claiming that "stablecoins are dangerous crypto assets" continue to appear incessantly. This is likely because the images of highly anonymous crypto assets seen in some parts of the world, as well as past incidents of misuse, are being projected onto domestic stablecoins.

However, this analogy is completely unjustified. Japanese stablecoins are subject to strict identity verification requirements for exchanges and wallet operators, and the flow of funds is transparently managed under the supervision of the Financial Services Agency. Structures that could become hotbeds for crime or money laundering by exploiting anonymity are excluded from the start, allowing users to always use stablecoins in a clean and secure environment.

Instead of being swayed by anxiety-inducing information online, if one calmly checks the legal system and the information disclosed by operators, anyone should be able to immediately understand that stablecoins are an extremely clean payment infrastructure.

To establish it as a next-generation infrastructure that everyone can use

The true purpose of stablecoins is ultimately to "deliver value accurately and quickly." Domestic transfers, which take anywhere from several hours to the next business day via bank transfer, can be completed almost instantly, 24 hours a day, 365 days a year with stablecoins. Moreover, fees are kept overwhelmingly lower than traditional bank transfers.

When it comes to international and domestic remittances, they have a significant advantage in both speed and cost compared to interbank settlements via Cotra or traditional SWIFT networks. This convenience is not just for a handful of technology enthusiasts; it is something that will greatly assist and contribute to a wide range of social activities for everyone, from daily sales management for retail stores and freelancers receiving payments from overseas clients, to local governments distributing benefits to residents.

We must completely dispel the outdated perception that confuses stablecoins with crypto assets and foster them into a social infrastructure that everyone can use with peace of mind as an evolution of electronic money and cashless payments. To achieve this, each of us is required to possess correct knowledge, avoid spreading misinformation, and cultivate the habit of calmly referring to official information in times of emergency.

If your understanding is still insufficient, there is no doubt that you can gain a deeper and more accurate understanding by checking the public documents released by the Financial Services Agency or the official support pages of each operator.

A note explaining the difference between JPYC and crypto assets (from the note by JPYC CEO Okabe)👇

I must say it loudly: 'JPYC and SANAE TOKEN are completely different.' - JPYC Okabe / note

文・編集：投稿主 

https://note.com/appleshozao