Will the Yields from JPYSC Operations Reach Households? Insights from Key Players in Distribution and Development

The Great Rotation Session Report
Will the Yields from JPYSC Operations Reach Households? Insights from Key Players in Distribution and Development

Tomohiko Kondo × Takashi Tezuka


A closed conference titled "The Great Rotation: How Japan Can Capture Global On-Chain Yields" hosted by Apyx and Allied Architects was held on October 2 in Tokyo. The session "The First Year of Japan's On-Chain Yields: What Stablecoins Bring to the 'Great Rotation' of Household Financial Assets" featured Tomohiko Kondo from SBI VC Trade and Takashi Tezuka from Startale Japan.
The discussion centered around the trust-based yen-denominated stablecoin "JPYSC." Topics included the yields and performance of lending, DeFi operations via exchanges in the U.S., the timing for lifting restrictions on external withdrawals based on tax reforms, and the tokenization of stocks and MMFs.
Speakers
Tomohiko Kondo, President and CEO, SBI VC Trade Co., Ltd.
Takashi Tezuka, CEO, Startale Japan Co., Ltd.
Moderator
Yusuke Shitara, Editor-in-Chief, Gentosha, New Economy
*The photo at the beginning shows, from left to right, Yusuke Shitara, Tomohiko Kondo, and Takashi Tezuka.

The Positioning of JPYC and JPYSC

The first point of discussion was the positioning of JPYSC. Shitara asked Kondo what distinguishes it from the many stablecoins available domestically and internationally.
Tomohiko Kondo
Currently, there are four stablecoins approved for circulation in Japan: USDC and RLUSD are dollar-denominated, while JPYC and our JPYSC are yen-denominated. JPYC is the first fund transfer type stablecoin issued in Japan in 2025, while JPYSC will be the first trust-based stablecoin. Legally, JPYC is classified as a type 1 electronic payment method, and trust-based stablecoins are classified as type 3, which means the regulations differ between the two.
Type 1 is a fund transfer type, so not only stablecoins but also regular fund transfer businesses can issue them. In the case of JPYC, it falls under the second category of fund transfer businesses, so there are regulations limiting issuance and redemption to 1 million yen per transaction. Once it is in circulation after being transferred to a non-custodial wallet (where users manage their own keys), there is no limit of 1 million yen; the restrictions apply only during issuance and redemption.
Trust-based stablecoins do not have such restrictions. JPYSC was initiated with that goal in mind.
In addition to the existing JPYC, it is expected that bank-based stablecoins and tokenized deposits will emerge in the future. While competitors may be rivals, are they also welcome? When Shitara posed this question, Tezuka emphasized the differentiation based on usage.
Takashi Tezuka
I think the official comment would be that we welcome them. However, since the frameworks differ between type 1 and type 3, the intended uses of JPYSC will also change.
Since JPYSC does not have the 1 million yen limit during issuance and redemption, it will depend on how to manage substantial funds. We expect it to cater not only to retail but also to wholesale uses for institutional investors, resulting in a natural differentiation.
While mega banks are also making progress, I have heard they are moving forward in a different form rather than on public chains. I believe JPYSC can meet the needs of institutional investors and on-chain operations.
Note: JPYSC began offering services on June 24, 2026. It is issued by SBI Shinsei Trust Bank, with SBI VC Trade handling circulation. Startale Group is involved in joint development. Under the Payment Services Act, JPYSC is classified as a type 3 electronic payment method.

Yields and Risks of JPYSC Lending

Stablecoins are linked to the value of fiat currencies, making it hard to envision generating profits from them. When Shitara raised this point, Kondo introduced the lending service that started in July.
Tomohiko Kondo
We issued JPYSC in June and began JPYSC lending in July. Whether for individual or corporate accounts, if you purchase JPYSC on our platform and lend it out, we will return it with yields after a certain period. It is converted into yen-denominated assets and lent out as is. Initially, the lending period was set at three months, and we started the service with a yield of 3% per annum upon maturity. It has been just under three months since the service began.
To be honest, currently, about 7.2 billion yen has been lent out. The issuance amount is 20 billion yen, so the total scale of JPYSC is just over 27 billion yen.
The current conditions we are offering are 2% per annum for one month, 2.5% for three months, and 3% for six months. Looking at just the yields, they are undoubtedly better than general deposits or time deposits.
Lending Bitcoin or Ethereum can yield capital gains if prices rise, but if they drop significantly, the assets may depreciate while held. When Shitara pointed out this difference and asked Kondo to clarify the risks, Kondo explained the nature of the risks.
Tomohiko Kondo
There is basically no price fluctuation risk. Simply put, you can think of it as whether SBI VC Trade, and by extension, the SBI Group, will go bankrupt during the deposit period.
Since we are borrowing, if we go bankrupt, there will be a repayment obligation for the lending, meaning a claim arises, but due to the subordination of repayment priority, there is a possibility that it may not be returned. If we were to go bankrupt and could not receive support from our parent company, there is a possibility that we would not be able to return funds to individuals or corporations. That is the risk, so I think it is good to evaluate how likely that could materialize.
Regarding the ratio of corporate users, Kondo answered frankly.
Tomohiko Kondo
Actually, about half are corporate. I would like individuals to participate, and it can also be done through the corporate accounts of their companies. If CFOs or finance personnel have idle assets, it is more advantageous than leaving them in a bank. We have temporarily raised the limit for applications to 500 million yen per account per week. The upper limit is still being adjusted.
Note: JPYSC lending applications began on July 16, initially offered with a 12-week maturity and a 3% annual rate. According to announcements from SBI Shinsei Trust Bank and SBI VC Trade, as of September 7, the issuance balance was approximately 20.1 billion yen, with lending applications amounting to about 6.9 billion yen, totaling approximately 27 billion yen. It is not covered by the deposit insurance system, and early termination during the lending period is generally not allowed. Lent JPYSC is not subject to separate management under the Payment Services Act.

Expanding DeFi Operations via Exchanges in the U.S.

Until now, the major users of stablecoins have been crypto traders or institutional investors. Is this trend spreading to households globally? Shitara directed this question to Tezuka.
Takashi Tezuka
To conclude, I would say that it is indeed coming in now. I think a significant player is Coinbase in the U.S. What are companies with Layer 2 Base doing as licensed exchanges? The UX is essentially that of a typical exchange, but within that, when users deposit USDC, they ultimately access DeFi through the UI and use lending from players like Morpho. Cases are emerging where DeFi is utilized through regulated exchanges.
In the past, when FX emerged, I believe there was a time when "Mrs. Watanabe" was actively trading, and something similar is happening in the U.S. with Coinbase. However, they may not have much awareness that they are engaging in DeFi or even crypto.
It is difficult for someone like Mrs. Watanabe to suddenly handle private keys in DeFi. There is a stablecoin at the entrance, and licensed financial institutions or exchanges that comply with regulations manage it while inviting such individuals in. I think that is the trend.
In Japan, there are still areas that need to be changed, including regulations, and it is true that the operational methods available beyond currencies like USDC and JPYSC are limited. However, after legal revisions, if stocks and investment trusts can be tokenized under the Financial Instruments and Exchange Act, and eventually leveraged operations can be conducted using them as collateral, a significant trend could emerge in Japan.

Note: "Mrs. Watanabe" refers to Japanese individual investors who made a significant impact on the foreign exchange market in the 2000s, as referred to by overseas market participants. Coinbase announced on September 18, 2025, the provision of a feature allowing USDC to be lent on-chain within the app. It collaborates with the lending protocol Morpho on its Layer 2, Base, distributing funds through a vault managed by Steakhouse Financial. Users can utilize it through the regular app interface.

Lifting Restrictions on External Withdrawals and the Presence of Yen-denominated Assets

In Japan, there are still not many businesses dealing with stablecoins. Regarding the difficulty of obtaining licenses, Mr. Kondo spoke frankly.
Tomohiko Kondo
First of all, it’s tough. There are similarities with cryptocurrency exchange businesses, so if you are not engaged in that business, it becomes like a double cost.
Currently, JPYSC cannot be transferred outside of SBI VC Trade. When this point was confirmed, Mr. Kondo raised tax-related issues.
Tomohiko Kondo
From the issuance in June until the start of lending, the only operation possible was to convert Japanese yen to JPYSC and back on the SBI VC Trade trading screen. It still cannot be transferred externally. Every year at the end of August, the Financial Services Agency publishes tax reform requests, and in 2026, it will announce a review of the inheritance tax law concerning trust-type electronic payment methods, namely stablecoins. What is written there is precisely about our company.
Due to issues with the inheritance tax law, we are currently intentionally not circulating it. Therefore, we decided not to release it at launch. If this tax system changes, we can release it externally. It can be sent to MetaMask, and if it is handled somewhere, transactions can be made there, and exchanges between individuals can also occur. Of course, it is not yet decided, but according to the current outlook, we expect to start by April 1, 2027, at the latest. We have less than six months left, and the current situation is that we can publicize it within six months at the latest.
On the other hand, for the first stablecoin like JPYC, it is not related to the inheritance tax law. With trust-type stablecoins, legally, each one becomes a matter of beneficial rights, leading to the question of who the beneficiaries are. It is necessary to apply existing regulations, which becomes a challenge. As a mechanism, it is only that external releases are not accepted, so if the screen is adapted, it will be possible to register any wallet address and send it.
In May, the Liberal Democratic Party issued a proposal for the Next Generation AI and On-Chain Finance Concept PT, and the legislators believe that if global yen-denominated stablecoins do not circulate, currency sovereignty will be diminished. The Japanese yen circulates globally at about 4-5%, including trade, but stablecoins have a global balance of 50 trillion yen, of which Tether accounts for about 30 trillion yen. In this context, JPYSC is currently limited to about 27 billion yen.
Compared to the global 50 trillion yen, Japan's yen-denominated stablecoins are limited to several hundred billion yen. Mr. Kondo expressed that efforts to bridge this gap align with policy direction.
Supplement: In the tax reform request announced by the Financial Services Agency on August 31 for the fiscal year 2027, it was requested to eliminate the need for the "Beneficiary Report by Trust" under the inheritance tax law and the "Trust Calculation Report" under the income tax law when the beneficiary of a trust-type stablecoin (specific trust beneficiary rights) changes. The start of external releases will depend on the realization of such tax measures and the organization of related laws and tax practices. The registration of electronic payment transaction businesses was first obtained by SBI VC Trade on March 4, 2025, and Coincheck completed its registration as the second domestic company on August 27, 2026.

The Significance of Tokenization of Stocks and MMFs

The discussion shifted to the tokenization of stocks. With global attention on movements like Ondo Finance, how will it progress in Japan, and will stablecoins be involved? Mr. Shitara asked both for their views.
Tomohiko Kondo
The law is still not established, but even if tokenized stocks are created, they probably cannot be traded on SBI VC Trade. It will likely be handled by securities companies. Security tokens (ST) are currently also in the domain of securities companies. I am primarily concerned about what licenses can be used and how the system will develop.
As a group, I believe such an era will inevitably come, so we aim for it. Even if we cannot sell it ourselves, we want to ensure that it can be purchased at securities companies while remaining our assets, so I tend to focus on how everyone will trade, and I want to create a product that can be used properly. Within the group, funds can be transferred in real-time between banks and securities, so we also want to be part of that mechanism.
Takashi Tezuka
As Mr. Kondo mentioned, the licenses, including the first-class financial instruments business, will change, so the legal aspects must be considered. Another point is that tokenization itself does not have much meaning unless it provides benefits to users when tokenized, and what significance it holds for issuers and distributors is crucial.
Securities companies already have customers who own Japanese and U.S. stocks. The question arises as to why these customers must hold tokenized assets at this timing. The discussion about fractionalization also does not change that clearly. Even with T+0 (settlement on the same day of the transaction) and 24/7 trading, it is questionable whether household investors will engage in such frequent trading. If that happens, they may lose sleep at night, which is not suitable for their original investment behavior. This needs to be clarified first.
When discussing tokenization in the U.S., where the legal system is advancing, nearly half of the demand is for U.S. Treasury bonds (Treasuries) and MMFs (money market funds). Strictly speaking, it includes not only MMFs but also tokenized funds like Franklin Templeton's BENJI and BlackRock's BUIDL, which tokenize high-rated safe assets. By switching from USDC to these, investors can enjoy yields close to 5% in the U.S. with MMFs while using them as collateral for OTC derivatives (over-the-counter derivative transactions not conducted through exchanges). The question arises as to how far transactions based on collateral can be conducted while maintaining a small haircut (discount rate on collateral). This is where the significance from the investor's perspective emerges.
On the other hand, if we try to tokenize MMFs in Japan, we will have to issue physical beneficiary securities according to the Investment Trust Law. While tokenization itself may be possible, transferability becomes an issue. If it cannot be transferred, it cannot be used as collateral. Since Japanese MMFs do not yield as much as U.S. dollars, merely holding tokenized MMFs may not justify the need to do it in crypto. We believe that we must organize and think through these aspects thoroughly before proceeding with tokenization; otherwise, it will end up being just a release without substance.
Supplement: On July 16, SBI Holdings announced a strategic partnership with Ondo Finance, which specializes in the tokenization of RWA (real-world assets). The goal is to tokenize Japanese stocks and provide Ondo's tokenized products within the SBI Group, with the main initiatives including utilizing JPYSC for settlement and collateral of Ondo's tokenized assets. According to Crane Data, the average yield (7-day) of the top 100 MMFs in the U.S. was 3.51% for the week ending September 4, 2026.

Session Summary

In the end, Mr. Shitara asked Mr. Kondo about measures to promote stablecoins, noting that while more than half of the attendees at the venue own stablecoins, the number of holders across Japan is still low.
Tomohiko Kondo
As mentioned earlier, we will go public by April 2027 at the latest, so I hope you will watch how the yen-based stablecoin develops from there and make use of it. That said, everyone here is at the top of the top when it comes to stablecoins. To spread it to the general public, we need to demonstrate clear value, such as yields.
In fact, taxation is still a challenge, as stablecoins are subject to comprehensive taxation, meaning that high-income individuals could be taxed up to 55% when combining resident tax. For example, if lending has an annual rate of 3%, then for operations up to about 6.66 million yen, miscellaneous income would remain below 200,000 yen. We must also properly disseminate the differences in the system, such as that if there are no other miscellaneous incomes, this range is not a problem. The hurdles are high, but we want to pursue services that are as easy to understand and generalized as possible.
Note: The usage fees for JPYSC lending are subject to comprehensive taxation as miscellaneous income. If a salary earner has annual income from sources other than salary below 200,000 yen, they will not need to file a tax return, provided they meet certain conditions. However, a separate declaration for resident tax is required.
Stating that this is a personal opinion, Mr. Shitara mentioned the staking rewards received in JPYSC that SBI VC Trade has started. If one wants to aim for capital gains, it is interesting to buy cryptocurrencies, stake them, and use the received JPYSC for lending, which Mr. Kondo explained.
Tomohiko Kondo
If you hold the rewards in cryptocurrency, there may be cases where you have paid taxes but the price has dropped. That was exactly the case in 2025. To avoid that, we want to create a flow where profits are realized through staking and the confirmed stablecoins are circulated.
Note: On September 2, SBI VC Trade started a service where rewards can be received in JPYSC for all staking target assets in the VCTRADE service. The rewards are converted to yen based on the selling price at 7 AM on the day of receipt, and 1 yen equals 1 JPYSC.
Mr. Shitara called on the audience to share these uses of stablecoins with others and concluded the session.
The next focus will be whether external withdrawals can be realized in the spring of 2027 after tax reform, and whether the yields of JPYSC will reach ordinary households.
Related Articles
Lending What is cryptocurrency lending? Interest rate list and comparison of six exchanges
Exchanges What is the reputation of SBI VC Trade? A thorough explanation of fees, advantages, and disadvantages
Sessions The future of trust-type yen stablecoins envisioned by JPYSC at WebX2026
Related Special Pages
Related CoinPost Interview Special | Interviews with key figures in the Web3 industry → Related What is WebX? The complete record of Asia's largest Web3 conference in August 2027 at Big Sight → Related What is MoneyX? Next-generation financial conference | The evolution of stablecoins and currencies → Related Web3 Event Calendar 2026 | Schedule of domestic and international events →