Comprehensive Stablecoin List and Top 10 Recommendations for Japan

Types of Stablecoins

Stablecoins are a category of crypto assets designed to maintain a stable value by being backed with fiat currency, real-world assets (RWA), or cryptocurrencies. Their main purpose is to avoid the high volatility of the crypto market while keeping a one-to-one value peg with fiat currencies. The primary types include fiat-backed, crypto-backed, algorithmic, and commodity-backed stablecoins.

In recent years, Japan has moved forward with stablecoin regulations. The enforcement of the revised Payment Services Act has heightened interest in stablecoins. USDC, a dollar-backed stablecoin, is expected to become available through partnerships with SBI and Coincheck. If stablecoins see widespread adoption, they could streamline corporate settlements—worth up to ¥1,000 trillion annually—and boost transparency in areas like tax auditing.

Fiat-Backed Stablecoins

Fiat-backed stablecoins are issued against collateral in fiat currencies, such as the US dollar or euro. These coins aim to maintain parity with their underlying currency—e.g., 1 coin = $1.

This type is highly trusted and carries low price volatility, making it a popular and stable choice in the crypto market. USDT and USDC are prime examples, available across many exchanges. Fiat-backed models are supported by real currency reserves, offering the highest level of stability.

Crypto-Backed Stablecoins

Crypto-backed stablecoins are issued using cryptocurrencies—such as Bitcoin or Ethereum—as collateral. To address price volatility, issuers typically hold more collateral than the value of stablecoins in circulation.

For example, DAI is managed by smart contracts and is widely used in the DeFi market. Because these coins operate without centralized oversight, they play a central role in decentralized finance (DeFi) ecosystems.

Algorithmic (Non-Collateralized) Stablecoins

Algorithmic stablecoins do not use fiat or cryptocurrencies as collateral. Instead, they stabilize value by dynamically adjusting supply through algorithms. These systems automatically manage supply and demand to keep prices near $1, but full stability remains a challenge.

While theoretically efficient, this model is vulnerable to extreme market swings. There have been instances where algorithmic stablecoins lost their peg, so users should proceed with caution.

Commodity-Backed Stablecoins

Commodity-backed stablecoins are issued against RWAs such as gold or oil. Some offer price stability by linking directly to RWAs. These coins especially appeal to users seeking long-term value preservation or inflation hedging through investment in physical assets.

Gold-backed stablecoins, which track the price of gold, are attractive to investors seeking to avoid fiat currency risk.

Advantages of Hybrid Stablecoins

Hybrid stablecoins combine multiple assets—fiat, cryptocurrencies, or commodities—as collateral to diversify risk and enhance price stability. By mixing various asset types, they reduce exposure to a single market and are designed to adapt to diverse conditions.

This approach can deliver more resilient price stability than models that rely on a single collateral asset.

Future of Security Token-Backed Stablecoins

Security token-backed stablecoins use tokenized financial assets—such as stocks or real estate—as collateral. As digitization of financial products and real estate progresses, security tokens are expected to see increasing use as new collateral assets.

Blending traditional financial assets with blockchain technology is expected to bring greater transparency to asset management.

Stablecoin Overview Table: Top 10 Choices

The following table compares the main features of leading stablecoins. Each uses different mechanisms and collateral strategies, so users can choose based on their preferences.

10 Stablecoins to Consider Buying

JPYC

JPYC is a yen-pegged stablecoin issued for Japanese users, operated in full compliance with local regulations. JPYC is backed by bank deposits and is legally classified as a "prepaid payment instrument."

Recently, JPYC began joint research with Mitsubishi UFJ Trust and Banking and Progmat to issue "JPYC (trust type)" as a stablecoin on the Progmat Coin platform, in line with the updated Payment Services Act. The goal is to obtain an electronic payment license in the near future.

As a yen-based stablecoin, JPYC is expected to play a key role in domestic payments and remittances.

USDC

USDC is a fully dollar-backed, centralized stablecoin known for its high transparency. Circle holds a dollar in bank accounts for every USDC issued and undergoes regular audits to ensure reliability.

With recent partnerships between SBI and Coincheck, USDC is set to enter the Japanese market—marking a milestone for dollar-backed liquidity in Japan’s stablecoin sector.

USDC’s transparency and trustworthiness make it a preferred choice for institutional investors and large-scale transactions.

Zipangcoin

Zipangcoin, issued by Mitsui & Co. Digital Commodities, is a yen-pegged stablecoin uniquely backed by gold. It is gaining attention in Japan as a means of transaction and asset protection, with one ZPG set to the price of one gram of gold.

Backed by a physical asset, Zipangcoin appeals to investors seeking inflation protection or long-term value preservation.

USDT

USDT (Tether) is the most traded stablecoin globally, but it often faces criticism for limited transparency. While Tether did not previously disclose details about USDT’s backing, some reports have been released in recent years, but questions remain regarding its reliability.

USDT is backed by commercial paper and other assets, but concerns about reserve transparency and reliability persist among investors and regulators. Nonetheless, its high liquidity and broad exchange support make it a key player in the crypto market.

DAI

DAI is a fully decentralized stablecoin issued via the MakerDAO protocol. It is minted by collateralizing ETH and other cryptocurrencies, operating without centralized control.

Multiple collateral assets have been added recently, enhancing DAI’s price stability. In the DeFi ecosystem, DAI is a foundational asset used in many DeFi protocols.

FRAX

FRAX is a unique hybrid stablecoin—partially algorithmic and partially collateralized. Its supply is algorithmically adjusted based on demand, while collateral is held in US dollars and cryptocurrencies.

This hybrid approach reduces the risks of a fully algorithmic model while delivering an efficient price stability mechanism.

Ondo US Dollar Yield

USDY stands out from traditional stablecoins by offering yield while being dollar-pegged. Issued by Ondo Finance, it is backed by high-credit financial assets like US Treasury bonds.

Holders can maintain a stable value and earn regular interest, appealing to investors who want to generate income while preserving assets.

TrueUSD

TrueUSD is a fully dollar-backed, centralized stablecoin known for transparent, regularly audited operations. Its high reliability makes TUSD especially popular with institutional investors and for large transactions.

TrueUSD also complies with legal and regulatory frameworks, making it a safe choice for users who value transparency and compliance.

GHO

GHO is a decentralized stablecoin issued by the Aave protocol. Users mint GHO by collateralizing cryptocurrencies and benefit from Aave’s liquidity provision and risk diversification mechanisms to obtain stable value based on their holdings.

Within the Aave ecosystem, GHO plays an important role in the DeFi market.

crvUSD

crvUSD is a decentralized stablecoin issued by the Curve protocol, minted by collateralizing cryptocurrencies. It leverages Curve’s efficient liquidity pools and swap mechanisms to maintain price stability.

In DeFi, crvUSD supports liquidity provision and improves trading efficiency.

Stablecoin vs. Bitcoin: Key Differences

Stablecoins and Bitcoin are both crypto assets, but their use cases and characteristics are distinct. The following table highlights the main differences.

Price Stability

Stablecoins are pegged to fiat currencies like the dollar or euro, making their prices stable and suitable for day-to-day payments and remittances. Bitcoin is highly sensitive to market trends, leading to large price swings—making it more suitable as an investment or store of value.

This difference means stablecoins are practical for payments, while Bitcoin serves a distinct role as an investment asset.

Issuance and Management

Stablecoins are issued by central entities or smart contracts and backed with fiat or other assets. Bitcoin is fully decentralized with a fixed supply cap.

This difference allows stablecoins to flexibly adjust supply, while Bitcoin’s scarcity remains preserved.

Use Cases

Stablecoins are ideal for remittances and business transactions. Bitcoin is often seen as "digital gold" and mainly used for investment and value preservation.

The two types complement each other, so users can select according to their needs.

Stablecoin Advantages and Disadvantages

Stablecoins offer a range of advantages, but also have some drawbacks. Here’s a closer look at their main pros and cons.

Advantages

Instant Settlement

Stablecoins leverage blockchain technology to enable international transfers and payments in near real time. Compared to the traditional banking system, fees are lower and transactions are faster.

International remittances that once took days can now be completed in minutes or hours using stablecoins.

Transparency

Many stablecoin issuers regularly disclose collateral details and holdings. USDC and TrueUSD, for example, undergo external audits to strengthen trust.

This transparency allows users to verify that stablecoins are properly backed and use them with confidence.

Diverse Peg Options

Stablecoins include options pegged to the dollar, euro, gold, and other cryptocurrencies, allowing users to select the best fit for their needs.

For example, those seeking to avoid dollar volatility may choose a gold-backed coin, while DeFi-focused users may prefer a crypto-backed stablecoin for use cases like DeFi.

Planned Issuance by Japanese Companies

In Japan, Progmat and JPYC are among the companies advancing stablecoin issuance. This is particularly appealing for domestic and international businesses seeking yen-denominated digital assets.

As yen-based stablecoins become more widespread, domestic payments and remittances will become more efficient and drive improvements in B2B transactions.

Disadvantages

Complex Tax Procedures

Japan is standardizing tax rules for stablecoin transactions, but processing can still be complicated.

In particular, exchanging between stablecoins or converting to fiat currency may be taxable, requiring careful record-keeping and reporting.

Requires Knowledge of Crypto Assets

Using stablecoins demands a basic understanding of blockchain and crypto assets. For beginners, this can be a barrier, and users must understand how to use them safely and correctly.

Proper wallet management, private key storage, and transaction verification are all required, making education and outreach critical.

Limited Acceptance

Stablecoin acceptance remains limited, and most retail businesses and services do not yet support them. While widely used in crypto markets, they are not common as a daily payment method—at least not yet.

However, more businesses and services are starting to accept stablecoins, and broader adoption is expected.

Deppeg Risk

Stablecoins are pegged to fiat or assets, but market volatility or lack of issuer transparency can cause the peg to break. Algorithmic stablecoins are especially prone to price swings.

There have been cases of stablecoins losing their peg and causing major losses, so it’s important to check issuer credibility and collateral status before use.

Summary: Diverse Stablecoin Models

Stablecoins come in various forms—fiat-backed, crypto-backed, algorithmic, and commodity-backed. Each type has its own risks and benefits, so users can choose according to their objectives.

Fiat-backed stablecoins like USDC and USDT offer strong price stability and are ideal for business payments and remittances. Crypto-backed models like DAI are popular among users seeking decentralized alternatives.

Stablecoins also provide a hedge against crypto market volatility, including Bitcoin. In Japan, yen-based stablecoins like Progmat and JPYC are set for launch, expanding use cases locally and abroad.

With more options, users can manage assets and transact efficiently while minimizing risk. Continued regulatory improvements and innovation are likely to make stablecoins even more important in the years ahead.

FAQ

What is a stablecoin? How is it different from regular crypto assets?

A stablecoin is a crypto asset tied to the value of a fiat currency like the US dollar. Regular crypto assets can experience large price swings, but stablecoins are designed for price stability, making them suitable for payments and remittances.

Which stablecoins are recommended for use in Japan?

DAI, USDT, and USDC are recommended in Japan. DAI is a crypto-backed, dollar-pegged stablecoin with strong stability. USDT and USDC are fiat-backed, widely used globally, and offer ample liquidity. The right choice depends on your needs.

What types of stablecoins exist? (Collateralized, algorithmic, etc.)

Stablecoins include fiat-backed, crypto-backed, algorithmic, and commodity-backed models. Fiat-backed coins use currencies like the dollar as collateral; crypto-backed coins use cryptocurrencies; algorithmic models have no collateral and rely on algorithms; commodity-backed coins are linked to physical assets such as gold.

Are stablecoins safe? What are the risks?

A stablecoin’s safety depends on the issuer’s credibility. Key risks include lack of reserve transparency, regulatory uncertainty, liquidity issues, and the ability to maintain value during market volatility. Always choose reputable issuers.

What are the main uses of stablecoins?

Stablecoins are mainly used for fast, low-cost international remittances and payments, as base currencies in DeFi platforms, and as an on-ramp/off-ramp for crypto trading due to their stable value.

Where can I buy stablecoins? What about Japanese exchanges?

You can purchase stablecoins at major Japanese crypto exchanges. DAI and ZPG, for example, are available domestically and can be bought easily through each platform. Check exchange websites for the latest supported assets.

How do overseas stablecoins like USDT/USDC differ from Japanese stablecoins?

Overseas stablecoins (USDT, USDC) are dollar-pegged and aimed at international use. USDT is highly liquid and widely adopted but has transparency concerns. USDC is strong on regulatory compliance and transparency. Japanese stablecoins are yen-pegged, focused on domestic payments, and comply with Japanese regulations.

What about stablecoin fees and taxes?

Stablecoin tax treatment depends on the type. Crypto-backed coins are taxed like other crypto assets, with gains taxed upon sale. Digital-money-type coins are treated more like cash, using fiat rates. Gains must be reported at the time of transaction.

Can I hold assets in stablecoins for the long term?

Yes, stablecoins are designed for price stability and are suitable for long-term holding. However, verify issuer reliability, regulatory changes, and collateral transparency before holding.

Which stablecoins are noteworthy in Japan in 2024?

In 2024, JPYC is a standout in Japan. It is yen-pegged, backed by assets like bank deposits and government bonds, and expected to play a major role in instant, low-cost international transfers and cross-border payments.