Japan's regulators and related companies are overhauling the financial system to invigorate stablecoins and the Web3 economy, Cointelegraph reported on Thursday.

The yen is an important currency in global finance, but it has yet to make its presence felt in the crypto asset market. Against that backdrop, a Web3 strategy led by Japan's largest financial group, SBI, puts a yen stablecoin at its core. SBI is building settlement infrastructure for trading securities and real assets through its own blockchain, Streamium. It is also seeking government approval for the effort. With carry trades that use Japan's low interest rates shaking global financial markets, the company said introducing a yen stablecoin could extend that activity into the decentralised finance market.

SBI and Startale Group plan to launch a yen-based stablecoin called JPYSC to implement carry trades on-chain.

Japan already has a yen stablecoin called JPYC, but its market capitalisation is about $20 million, making it unsuitable for carry trades. Major Japanese banks are also jointly considering issuing a yen-based stablecoin, but retail investor participation is low. Cointelegraph reported that this is due to crypto asset taxes of up to 55 percent, and the government is considering cutting that to 20 percent and introducing exchange-traded funds.