Japan’s regulators and conglomerates are working to bring one of the world’s key funding currencies into DeFi, but retail activity remains muted.
Japan is preparing its financial system for a world of stablecoins and tokenized assets, with banks, regulators and financial conglomerates working to bring the yen economy onchain.
The country is the world’s fourth-largest economy, and its yen is one of the most important currencies in global finance. According to the International Monetary Fund, the yen accounted for 5.82% of global foreign exchange reserves, ranking third worldwide.
A major reason for the yen’s systemic importance is the carry trade. Due to low interest rates, investors borrow cheap yen, convert it into other currencies and invest in higher-yield assets, making the yen one of the most trusted funding currencies for global markets.
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