From Tokyo to Wyoming: How Governments Are Shaping Stablecoins (ASA News #5)

*[ASA News] is a bi-weekly newsletter where we share the most important news related to stablecoin in Asia. (2025.08.11~08.24)

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Written by Moyed, Heechang

1. Japan to Approve First Yen-Denominated Stablecoin

1.1 [News] FSA prepares to greenlight trust-bank-issued stablecoin

Source: Japan's Financial Regulator to Approve First Yen-Denominated Stablecoin: Report

Japan’s Financial Services Agency (FSA) is reportedly set to approve the country’s first yen-denominated stablecoin, issued under the revised Payment Services Act. The move will allow trust banks to back stablecoins with safe assets such as cash and government bonds, marking a significant step toward integrating stablecoins into Japan’s regulated financial ecosystem. Market participants view this as a milestone in legitimizing stablecoins as part of Japan’s payment and settlement infrastructure.

1.2 Commentary

1.2.1 Moyed (ASA Contributor, Delta Network) - JPYC as the first major milestone of Japan’s stablecoin journey

This development goes beyond the success of a single company. It represents the first tangible outcome of Japan’s broader legislative effort, launched with the June 2023 revision of the Payment Services Act, which defined stablecoins as “currency-denominated assets” and restricted issuance to banks, trust companies, and licensed fund transfer businesses. JPYC’s registration and forthcoming issuance will serve as the initial test of this carefully designed regulatory framework.

The Tokyo-based fintech has ambitious plans, targeting issuance of up to ¥1 trillion in stablecoins within three years. Early applications are expected in international remittances for students and workers, corporate settlements, and blockchain-based asset management. Another promising direction lies in using JPYC for on-chain carry trades, replicating the traditional yen-funded strategy but enhanced with programmable features, near-instant settlement, and composability within DeFi.

2. Wyoming Unveils “Frontier Token” for Stablecoin Adoption

2.1 [News] Wyoming continues to lead the way for crypto policy in the U.S.

Source: What Wyoming’s Frontier Token Means For Stablecoin Adoption

Wyoming has launched the Frontier Token, the first state-issued stablecoin in the United States. Backed 102% by U.S. dollars and Treasury bills, the token is designed to operate across seven blockchains via the LayerZero protocol. According to Governor Mark Gordon, the initiative aims to reduce settlement delays and fees in the financial system while establishing a legally compliant framework for blockchain-based payments.

What sets the Frontier Token apart is its public-good design. Interest earnings from reserve assets will be reinvested into education and other state programs, providing a new model for how stablecoins can serve both economic and social goals. Officials have also emphasized safeguards against surveillance concerns often associated with CBDCs, noting that Wyoming cannot impose arbitrary restrictions on usage. Although not yet available to the public, the token is being positioned as a test case for other U.S. states seeking to bridge stablecoin adoption with fiscal policy, potentially paving the way for broader government-backed initiatives in digital money.

2.2 Commentary

2.2.1 Moyed (ASA Contributor, Delta Network) - Definitely an interesting case, still figuring out the value prop.

The Frontier Token is noteworthy because it is not issued by a bank or a private company, but by a U.S. state government. This makes it the first of its kind and raises important regulatory questions. The recently enacted federal GENIUS Act sets rules for stablecoin issuers, including restrictions on paying interest. Yet, as Jason Mikula notes, the Act defines its scope around “persons,” which may not legally include state governments. This creates a potential loophole: a state-issued stablecoin could, in theory, offer features such as distributing reserve interest, something private issuers like Circle or Tether are prohibited from doing.

What remains uncertain, however, is the actual value proposition of the Frontier Token(FRNT) compared with existing stablecoins like USDC or USDT. Beyond its public-good framing, it is unclear whether FRNT will drive meaningful adoption in payments and markets. The project also recalls Korea’s local currency initiatives, where municipalities issue digital or card-based credits to support local economies. While structurally different from a blockchain-based stablecoin, the FRNT could serve as an interesting case study for public authorities in municipalities considering how a future won-based stablecoin might connect, or diverge, from existing local currency programs.

3. South Korea’s Top Banks Explore Partnerships with Tether and Circle

3.1 [News] Korean banking sector moves closer to global stablecoin issuers

Source: South Korea’s Top Banks Said to Meet Tether, Circle on Stablecoin Partnerships: Report

South Korea’s leading commercial banks are reportedly in talks with global stablecoin issuers Tether and Circle over potential partnerships. Discussions focus on exploring won-based and dollar-based stablecoin applications for remittances, payments, and tokenized finance. The development comes shortly after Korea’s Digital Asset Basic Act, which created a regulatory foundation for stablecoins, raising expectations of deeper integration between domestic banks and global stablecoin networks.

3.2 Commentary

3.2.1 Moyed (ASA Contributor, Delta Network) - What Role Will Tether and Circle Play in Korea’s Stablecoin Push?

In a jurisdiction like Korea, where a won-based stablecoin would require domestic oversight under the Digital Asset Basic Act, what role can global issuers realistically play?

Looking abroad offers some perspective. In Japan, Circle partnered with SBI Holdings to establish a licensed entity that could issue USDC directly under the revised Payment Services Act. In Europe, Circle has applied for registration under the EU’s MiCA framework to operate as a regulated e-money issuer. In both cases, Circle has positioned itself not only as a technical provider but also as a direct issuer willing to adapt to local rules. Tether, by contrast, has remained primarily a dollar-focused issuer, occasionally exploring non-USD pegs (like the euro and peso) but rarely entering into joint ventures with domestic banks.

If Korean banks are to launch a won-based stablecoin, it is unlikely that Tether or Circle would become the issuers themselves. More plausibly, they could serve as technical partners, liquidity providers, or distribution channels for interoperability between won-based stablecoins and global dollar stablecoins. Ultimately, the Korea’s challenge will be to strike the right balance: harnessing the network effects of USDC and USDT while ensuring that won-based stablecoins remain firmly under local regulatory guardrails.

4. Other News

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4.1 Theme 1. Institutions Moving Into Stablecoin Infrastructure

4.1.1 Animoca Brands and Standard Chartered to Launch AnchorPoint Financial

• Hong Kong’s Animoca Brands partners with Standard Chartered to launch AnchorPoint Financial.

• Initiative will connect Web3-native infrastructure with traditional banking through tokenized assets and stablecoin services.

• Part of a broader trend of banks entering the digital asset space in partnership with crypto-native firms.

4.1.2 Paxos Seeks U.S. National Bank Charter License

• Paxos joins Ripple and Circle in pursuing national bank charters in the U.S.

• Goal is to operate under federal oversight and gain parity with traditional financial institutions.

• Reflects a shift toward embedding stablecoin issuers directly into the regulated banking system.

4.1.3 Stripe and Circle Launch Their Own Blockchains

• Stripe and Circle are building proprietary blockchains to improve settlement efficiency for stablecoin payments.

• Strategy reduces reliance on third-party networks while optimizing for compliance and scale.

• Highlights a move from issuers to become full-stack infrastructure providers.

4.2 Theme 2. Onramps, Payments, and Remittances

4.2.1 RedotPay Expands Instant Fiat-to-Stablecoin Onramps in UK & EU

• RedotPay launches instant fiat-to-stablecoin conversion services in the UK and EU.

• Service lowers friction for both consumers and merchants in accessing digital assets.

• Strengthens Europe’s growing payments ecosystem for stablecoin adoption.

4.2.2 Money Exchanges Plan Faster Remittance Services with Stablecoins

• Leading Gulf money exchanges plan to integrate stablecoins into cross-border transfers.

• Aim is to reduce costs and settlement times for remittances.

• Reinforces stablecoins’ growing role in global remittance markets.

4.2.3 MetaMask to Launch mUSD Stablecoin on Linea

• Consensys’ MetaMask is preparing to launch its own stablecoin, mUSD, on Ethereum’s Linea network.

• The token will integrate directly into MetaMask’s wallet ecosystem for payments and DeFi.

• Marks a major move by a wallet provider into native stablecoin issuance.

4.3 Theme 3. Regional Challenges and Regulatory Shifts

4.3.1 South Korea’s Stablecoin Push Stalls Over Short-Term Bond Shortages

• Korea’s stablecoin development is slowed by a lack of short-term government bonds for reserves.

• Regulatory rules require high-liquidity assets, creating supply bottlenecks.

• May delay timelines for the launch of won-pegged stablecoins under new legislation.

4.3.2 Hong Kong Debates Whether Banks Will Lead Stablecoin Issuance

• Hong Kong’s new licensing regime has sparked debate on whether banks will be the first stablecoin issuers.

• Banks’ balance sheets and governance standards could give them a regulatory advantage.

• Raises questions about whether fintechs or traditional banks will lead in Asia’s hub.

4.3.3 China Signals Renewed Push for Stablecoins

• Commentary notes China is late to stablecoins but preparing to accelerate efforts.

• Domestic firms are experimenting with yuan-denominated tokens and pilots abroad.

• Suggests China may still catch up, leveraging its financial scale and policy support.