SBI Expands JPYSC Stablecoin Strategy into Japanese Bond Market
Ripple partner SBI Holdings has taken its JPYSC stablecoin strategy to the next level by investing a portion of its reserves in Japanese government bonds. This move is a significant development, as it allows the company to comply with new reserve regulations in Japan while generating returns on its investments.
According to SBI, it will use part of its dedicated JPYSC reserves to invest in short-term Japanese government securities through SBI Shinsei Trust Bank and SBI VC Trade. This is a major milestone for JPYSC, as it becomes the first trust-based yen stablecoin in Japan to adopt these new reserve regulations.
The revised Payment Services Act in Japan, which came into effect on June 1, allows eligible trust-backed stablecoins to keep up to 50% of their tokens in short-term government bonds or time deposits. SBI Shinsei Trust Bank has already invested 1 billion yen in JPYSC's backing assets in Japanese government bonds.
The move follows indications of softer demand for Japan's government bond market, with the auction for the five-year bond on June 22 receiving less interest than previous auctions. The bid/cover ratio declined to 3.11 from 3.22 last year and 12 months ago, which averaged 3.47.