Decentralized lending protocol Morpho announced support for JPYC, a regulated Japanese yen stablecoin, expanding non-dollar currency options in DeFi markets.
The integration adds JPY-denominated liquidity on-chain for the first time at institutional scale.
Steakhouse Financial plans to deploy a JPYC-based vault on Morpho by year-end 2024.
JPYC launched in October 2025 as Japan's first fully regulated yen-pegged stablecoin under supervision from the Financial Services Agency.
What Happened
JPYC operates as a 1:1 yen-backed stablecoin with reserves held in Japanese bank deposits and government bonds.
The token runs on Ethereum (ETH), Polygon and Avalanche (AVAX) with full compliance under Japan's Payment Services Act.
JPYC Inc. targets 10 trillion yen ($65-70 billion) in circulation within three years.
Current market capitalization sits around $8 million following the October launch.
Morpho's integration enables JPY-denominated lending and borrowing on-chain for qualified users.
The protocol previously operated exclusively with USD-denominated stablecoins including USDC and USDT.
Steakhouse Financial, which manages over $390 million in USDC vaults on Morpho, will curate the JPYC lending markets.
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Why It Matters
The integration opens possibilities for yen carry trade strategies in decentralized finance.
Traditional carry trades involve borrowing yen at low interest rates to invest in higher-yielding USD assets.
Bank of Japan rates remain structurally lower than U.S. Federal Reserve rates despite recent increases.
JPYC enables on-chain execution of cross-currency strategies previously limited to traditional finance.
USD stablecoins currently dominate DeFi lending with USDC and USDT accounting for the vast majority of activity.
Adding regulated JPY liquidity creates scope for sophisticated cross-currency positioning as additional fiat currencies move on-chain.
The development signals growing institutional demand for non-dollar stablecoin infrastructure in DeFi protocols.
JPYC distinguishes itself from previous yen-pegged tokens through regulatory compliance and FSA licensing as a funds transfer provider.
The stablecoin operates without transaction fees, generating revenue from interest on Japanese government bond reserves.
Multi-chain deployment enables interoperability with existing DeFi applications and exchanges worldwide.
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