Onigiri Weekend Digest: Institutional Lens #6

🌐 Website | 💼 Linkedln | 📰 Past Editions

Good weekend from Onigiri Capital!

This week, Asia’s stablecoin map lit up: Japan’s first legally-recognized yen stablecoin went live, and the first Korean-won stablecoin launched on Base.

Recap this Week's Headliners

SS #43 - Japan’s Yen Stablecoin Goes Live 
SS #44 - First Korean Won Stablecoin Hits Base

Two markets, two strategies—regulation-first JPY vs distribution-first KRW—but one common trend: local-currency stablecoins are moving from pilot to production, shifting value from issuers to the platforms that control users and flow. 

Beyond financial hubs like Hong Kong and Singapore, Indonesia, the Philippines, and Thailand are emerging as the next regional corridors where IDR-, PHP-, and THB-pegged stablecoins could enhance settlements, supported by active central-bank digital currency pilots and fintech participation.

As regulatory clarity deepens and regional infrastructure matures, we look forward to broader stablecoin development across Asia—driving greater adoption, interoperability, and efficiency in cross-border payments and digital finance.

Enjoy the read!

You read and share. We listen and improve. Send us feedback at [email protected].

🍙Onigiri Take

Japan’s JPYC and Korea’s KRWQ represent far more than new stablecoin tickers — they are policy-grade proof of concept for domestic-currency settlement and a turning point in Asia’s digital asset infrastructure. Yet, their approaches reveal two distinct strategic models for how non-USD stablecoins may evolve in regulated markets.

• Japan = “Regulation-first, banks-compatible.” JPYC is the first yen-denominated stablecoin issued under Japan’s revised Funds Settlement Act and Payment Services Act. Fully backed by yen deposits and Japanese government bonds, and requiring identity verification via the My Number system, JPYC sets a clear compliance benchmark. Its architecture makes it immediately interoperable with Japan’s banking and corporate systems — serving as both a blueprint for institutional adoption and a direct challenge for megabanks to accelerate their own yen-token programs.

• Korea = “Distribution-first, multichain reach.” KRWQ, launched by IQ and Frax, takes a different path. It is the first won-pegged stablecoin deployed on Base, Coinbase’s Ethereum Layer-2 network, built using LayerZero’s Omnichain Fungible Token (OFT) standard to enable cross-chain portability from day one. While regulatory clarity in Korea remains pending — amid debate between the Bank of Korea and private issuers — KRWQ’s early focus on global liquidity and institutional due diligence positions it to gain first-mover mindshare ahead of domestic approval.

Why it matters for Asia now:

• Regulatory clarity is arriving. JPYC and KRWQ mark the shift from experimentation to compliance-driven issuance, unlocking real institutional use cases in treasury, trade settlement, and payroll.

• FX is becoming programmable. JPY↔KRW↔USD corridors will enable near-instant (T+0) settlement, reducing reconciliation frictions and basis-risk exposure for corporates and financial institutions.

• Regional spillover is imminent. With Hong Kong and Singapore advancing their own regulatory frameworks, HKD- and SGD-pegged stablecoins are poised to emerge next — particularly in trade finance, remittances, and cross-border treasury operations.

Japan and Korea’s divergent but complementary approaches signal the start of a regional race where infrastructure ownership equals monetary influence.

🍙Winners & Losers: Institutional Outlook

🍙Under the Hood: Yen & Won Stablecoins

JPYC:

• Status: Since launch, JPYC has begun onboarding corporate and fintech partners for payment, settlement, and loyalty use cases. Early integrations are emerging across e-commerce, payroll platforms, and regional payment processors, supported by APIs designed for enterprise adoption. Circulating supply remains modest but growing steadily as issuance expands through licensed trust banks.

• Why it’s different: JPYC is onshore and supervised within a G7 regime, positioning it as a compliance-grade counterparty for corporates, banks, and domestic settlement networks.

KRWQ:

• Status: KRWQ has built early liquidity pools on Base and established trading pairs across key DeFi protocols. It’s gaining traction among cross-chain liquidity providers and DeFi treasuries seeking non-USD diversification. While it remains inaccessible to domestic Korean users, international adoption is growing, particularly among traders and on-chain funds experimenting with KRW-denominated settlement.

• Why it’s different: Goes where liquidity is (global DeFi) before local licensing, seeding FX pairs and integrations that will matter once Korea green-lights scope.

🍙Stablecoin ≠ Crypto — Financial Market Plumbing, Not Speculation

Local-pegged stables are payment instruments and balance-sheet tools, not risk tokens. Treat them like regulated money market wrappers with programmability:

• Price stability > token appreciation. The win is operational efficiency (settlement, reconciliation, auditability).

• Distribution is the moat. Chains, CEXs, wallets, and fintechs that own user flow will capture the carry and fees — not necessarily the issuer.

• Policy leverage. Governments get visibility + control (KYC, reserves, audits) while enabling digital commerce rails.

Regional Signals — Who’s Next Around Japan & Korea?

• Hong Kong: Active stablecoin sandbox and VASP licensing — expect more HKD-aligned instruments and institutional pilots tied to securities/RWA rails.

• Singapore: Stablecoin framework is live; SGD-linked models (bank/fintech) are positioned for cross-border treasury and trade-financing pilots.

• ASEAN: Payments-centric regulators watching JPY/KRW closely; expect merchant settlement and remittance use-cases with local pegs before retail expansion.

Why local-pegged stables matter:

• FX frictions are real P&L.

• Policy alignment reduces compliance drag for enterprises.

• Multi-currency liquidity hedges USD outages and widens institutional participation.

🍙Institutional Risks & Unknowns

1. Regulatory Fragmentation: Divergent approaches — e.g., Korea’s potential bank-only model and lack of mutual recognition — slow multi-jurisdiction issuance and settlement interoperability.

2. Reserve Transparency: Uneven disclosure and audit frequency across issuers undermine institutional confidence and regulatory acceptance.

3. Liquidity Fragmentation: Competing local stablecoins without shared liquidity routes risk shallow pools and higher trading slippage.

4. FX & Market Stress: Local pegs may face stress during volatility; resilient reserve governance and circuit breakers are essential to maintain parity.

Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.

If you'd like to discuss or contribute to the next Institutional Lens, contact us at [email protected]

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.

1