Asia Morning Briefing: What's the Real Use for a Yen Stablecoin?

Japan has launched Asia's first yen-backed stablecoin, which aims to leverage the currency's convertibility to boost decentralized finance (DeFi) opportunities. The yen's low interest rates make it an attractive funding option, allowing traders to borrow digital yen and pursue higher yields in dollar-linked assets. This innovation creates a programmable version of the yen carry trade that links DeFi yields directly to Bank of Japan policy. Even as Japan maintains its rates at 0.5%, the on-chain yields from platforms like Maple and Lista offer much more lucrative returns compared to Japan’s money markets. However, the potential daily borrowing capacity remains limited, indicating that Japan's cautious financial approach persists in the blockchain sphere. Meanwhile, Bitcoin and Ether have experienced drops in demand, reflecting a cooling interest among investors after recent highs.

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