The June 2023 amendments to Japan's Payment Services Act (PSA) created the "electronic payment instrument" (EPI) category, Japan's regulated wrapper for fiat-pegged stablecoins. The amendments were approved by the Diet on 3 June 2022 and took effect on 1 June 2023, supervised by the FSA (Financial Services Agency) (Plasma stablecoin regulation map - Japan). The framework restricts EPI issuance to three regulated entity types (banks, fund-transfer service providers (FTSP), and trust banks/trust companies) and creates a separate intermediary registration for distributors. Japan was the first major jurisdiction to ship a production stablecoin perimeter under unified statute, and the three-route structure remains the most granular issuer-form taxonomy of any major regime. Editorial deep-dive on how the routes differ in practice lives at japan psa stablecoin routes in themes.

Scope

The Act covers fiat-pegged stablecoins issued at a price linked to a fiat currency (for example one coin equal to one yen) with redemption guarantees. These are classified as electronic payment instruments and sit outside the existing crypto-asset perimeter under the PSA. Algorithmic and crypto-collateralised stablecoins remain in the crypto-asset category rather than qualifying as EPIs.

Tokenised deposits issued by banks remain banking products under the Banking Act and are not classified as EPIs. Tokenised securities sit under the Financial Instruments and Exchange Act. The EPI category applies to a fiat-pegged transferable token whose holder has a redemption claim against the issuer.

Mechanics

Only banks, fund-transfer service providers, trust banks, and trust companies licensed or registered in Japan may issue EPIs directly to Japan residents. The three routes inherit the supervisory perimeter of the parent licence.

Bank-direct issuance puts the EPI on the bank's balance sheet, with the holder exposed to single-name credit risk on the issuing bank. Supervision continues under the Banking Act with the EPI programme as a supervised line of business.

The FTSP route allows a non-bank licensed for fund transfers to issue an EPI whose unit-of-account is a yen claim on the FTSP, with reserves segregated. JPYC (Japan Yen Coin) chose this route, registering as an FTSP on 18 August 2025 and launching the first FSA-approved yen stablecoin on 27 October 2025 (Chambers Fintech Japan 2025). JPYC reserves are cash deposits and Japanese government bonds as of late 2025.

The trust route holds the underlying reserve as trust property, with the on-chain instrument being the beneficial interest in the trust. Under Japanese trust law the trust property is bankruptcy-remote from the trust company itself. Progmat is the worked example, a megabank consortium led by MUFG with Mizuho, SMBC, and other participants.

Distribution and intermediation sit under a separate registration. The Act creates the "service provider of transactions using electronic payment instruments" category, covering intermediaries that handle distribution, custody, or transfer of EPIs without issuing them (IFLR analysis). Intermediaries must segregate user funds, undergo periodic CPA audits, maintain written agreements with issuers on liability allocation, and operate dispute-resolution procedures. Crucially, intermediaries are barred from accepting deposits of money from users.

Reserve composition is set by route. Bank-direct reserves sit on the bank's balance sheet under existing prudential supervision. FTSP reserves must be segregated and held in cash and JGBs with disclosure at the issuer level. Trust reserves are held as trust property, with composition disclosed to beneficiaries on the cadence in the trust deed.

Status

In force from 1 June 2023. The regime has been in production for nearly three years as of late April 2026. JPYC's October 2025 launch is the first live FTSP-route EPI; trust-route products under the Progmat brand have shipped since 2023; bank-direct issuance has been slower despite being legally available. The FSA has not signalled material amendments but has continued to publish supervisory guidance on intermediary obligations.

Implications for tokenisation

For a counterparty integrating yen stablecoin flows, the route determines what they are holding. A bank-direct EPI is a single-name bank credit exposure. An FTSP-issued EPI is a segregated-reserve claim on a non-bank intermediary. A trust-issued EPI is a beneficial interest in trust property, bankruptcy-remote from the trust company. Treasury and risk teams need to discriminate between these three in a way they do not for USDC or a Hong Kong Ordinance-licensed token.

For cross-border use, the FTSP and bank-direct routes produce a bearer-style instrument an offshore wallet can hold with familiar mechanics. The trust route is awkward for non-Japanese counterparties because beneficial-interest tracking sits behind permissioned-transfer logic at the contract level, closer to a tokenised fund interest than a payment stablecoin.

For agentic commerce, the FTSP route is the cleanest fit: an AI agent faces issuer-level transfer controls but not registered-beneficiary tracking. The trust route is awkward for an agent without a registered beneficial-interest record. The intermediary registration is the under-appreciated piece: a foreign exchange or wallet distributing a JPYC or Progmat EPI to Japan residents must register as an EPI service provider, with the deposit-taking prohibition.

Open questions

• Whether bank-direct issuance accelerates now that JPYC and Progmat have shipped, or megabanks continue to default to the trust route.
• Treatment of foreign-issued stablecoins distributed to Japan residents through registered intermediaries, where the issuer sits outside the EPI perimeter.
• Reserve composition disclosure cadence and standardisation across the three routes.
• How the EPI perimeter interacts with FSA work on tokenised deposits and the Bank of Japan CBDC pilot.