Japan, South Korea lead Asia’s local stablecoin push in 2025
As 2025 draws to a close, Asia's stablecoin narrative looks markedly different from a year ago. While U.S. dollar-backed stablecoins such as USDT and USDC continue to dominate on-chain liquidity, policymakers, banks, and crypto firms across the region spent the year laying the groundwork for a more diversified stablecoin ecosystem — one that would no longer be solely anchored to the dollar.From Tokyo to Seoul, regulatory initiatives and high-profile launches have signaled a strategic shift toward non-USD stablecoins, even as the market remains small in scale relative to dollar-backed stablecoins."What’s happening in Asia now is that policymakers are encouraging local currency stablecoin issuance to ensure their domestic financial systems aren't left behind as activity moves on-chain," said Angela Ang, head of policy and strategic partnerships for APAC at TRM Labs. "These moves are about diversifying options and offering credible alternatives where local currencies are more appropriate. But whether that ultimately shifts liquidity in a meaningful way remains to be seen."Non-USD stablecoins take shapeJapan and South Korea emerged as the clearest bellwethers of that shift. In October, Japanese fintech firm JPYC launched what it described as the country's first legally recognized yen-backed stablecoin. Japan's three megabanks — MUFG, SMBC, and Mizuho — also kicked off stablecoin and tokenized deposit pilots spanning payments, interbank settlement and institutional financial services. In December, the Financial Services Agency officially announced its support for the stablecoin pilot project involving the three banks.Financial conglomerates also moved to secure their place in the emerging sector, with SBI Holdings unveiling plans to work with blockchain firm Startale on stablecoin issuance and infrastructure."Japan has watched the yen weaken for years, and it’s looking for new ways to keep the currency relevant globally," Tim Sun, senior researcher of HashKey Group, told The Block. "A yen stablecoin gives Japan a chance to rebuild the yen's role in a digital-first economy — especially for cross-border payments and settlement."Meanwhile, South Korea witnessed a surge in Korean won-pegged stablecoin initiatives. In September, crypto custody firm BDACS launched KRW1 on the Avalanche network, positioning it as a globally used stablecoin for remittances and payments.Shortly after, KRWQ — another won-pegged stablecoin — debuted on Coinbase's Base network in October, underscoring how Korean issuers are experimenting across multiple chains and ecosystems. South Korea's KakaoBank also advanced its won-pegged stablecoin initiative to the actual development stage. Stablecoins emerged as a recurring theme in crypto regulations across Japan and South Korea in 2025. In Japan, regulators moved to tighten oversight while continuing to support stablecoin experimentation. South Korea has yet to introduce a formal stablecoin framework, though authorities have indicated efforts are underway to establish one.Real adoption?Beyond the headlines, however, skepticism persists about whether these non-USD stablecoin initiatives represent genuine adoption or strategic positioning. "It's still too early to draw conclusions — less than a year of market activity isn't enough to gauge real adoption. What we’re seeing today is more about positioning than volume," said Ang of TRM Labs.Ang added that stablecoins are ultimately a new representation of money, and that the dominance of dollar-backed stablecoins largely reflects the U.S. dollar's central role in the global financial system.Chen Wu, CEO of Hong Kong-licensed crypto and tokenization firm EX.IO, echoed that view more bluntly. "Most non‐USD stablecoins launched in Asia don't matter — because their underlying currencies don't matter in global trade," Wu said. "Market gravity still bends toward the USD, and that's not changing overnight."According to CoinGecko data, U.S. dollar-backed stablecoins dominate the $312 billion stablecoin market, with their $303.3 billion valuation representing over 97% of the total. Among non-USD assets, euro-denominated stablecoins hold a $679.8 million market cap, while those pegged to the Japanese yen account for $16.4 million.Diversifying the stackFrom a payments and market-structure standpoint, Eddie Xin, head of research at OSL Research, said that the most notable non-USD stablecoins launched this year were those designed explicitly as payment and settlement infrastructure. Xin pointed to Japan's JPYC, the offshore yuan stablecoin AxCNH, and Korea's KRW1, which are primarily geared toward cross-border remittances, regional trade, and enterprise payments. Singapore's XSGD and the Philippines' PHPC have seen use in remittance flows and online income settlement in Southeast Asia, Xin added."These instruments are not designed to 'replace the dollar,' but rather to diversify today's USD-concentrated stablecoin structure through JPY-, CNH-, KRW-, and SGD-denominated options," Xin said. Such diversification, he added, allows digital currency systems to better align with domestic monetary frameworks and regional trade patterns.Looking ahead to 2026, Xin said Northeast and Southeast Asia are likely to evolve into a multi-currency stablecoin corridor, with the most compelling opportunities centered on payments-first use cases — including cross-border payments, working-capital management and trade settlement — rather than simply adding more tradable tokens.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. 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