Asia Advances Local Currency Stablecoins Amid US Dollar Dominance

The stablecoin market in Asia changed direction in 2025 while the digital dollar pegged to the U.S. maintain dominance. Governments, banks, and digital asset companies increasingly focused on stablecoins linked to local currencies.

Rather than seeking to displace the U.S. dollar, Asian countries focused on creating stablecoins tied to their local currencies.

Policy Support for Local Currency Stablecoins

Throughout the year, policymakers in several Asian countries promoted the development of stablecoins linked to domestic currencies. This approach aimed to keep local financial systems relevant as digital payments and on-chain settlements spread.

Regulators focused on careful testing, with strong attention to stability, rules, and financial control. Although these efforts are still limited, they show a long-term plan to rely less on the U.S. dollar. 

Even with more rules and pilot projects, the future of non-dollar stablecoins in Asia is still uncertain, and dollar-backed stablecoins remain dominant. 

The global stablecoin market is about $312 billion, with over 97% backed by the U.S. dollar. Euro stablecoins are less than $1 billion, and yen-backed stablecoins are just over $16 million.

Japan Leads Asia’s Yen Stablecoin Efforts

In 2025, Japan showed how regulators and institutions can cooperate on stablecoins. In October, fintech company JPYC launched Japan’s first legally approved yen-backed stablecoin. This move brought stablecoins into the country’s regulated financial system.

At the same time, major banks MUFG, SMBC, and Mizuho began pilot projects for payments, bank settlements, and institutional services. These projects received support from the Financial Services Agency (FSA) in December.

Large firms like SBI Holdings also entered the stablecoin market. Their goal is to keep the yen relevant in the digital economy, particularly for cross-border payments and settlements.

South Korea Expands Won-Backed Stablecoin Initiatives

In 2025, South Korea made significant progress in developing won-backed stablecoins, reflecting a growing interest in digital currency solutions tied to local money. 

In September, crypto custody firm BDACS launched KRW1 on the Avalanche network as a stablecoin for international payments and remittances. 

The next month, another won-backed stablecoin, KRWQ, launched on Coinbase’s Base network, showing that Korean companies are exploring different blockchains. 

At the same time, KakaoBank moved its won-backed stablecoin project from planning to active development, showing strong interest from major institutions.

Stablecoins also became an important topic in South Korea’s regulatory discussions. Although there is no formal stablecoin framework yet, authorities are working on clearer rules.

Looking ahead, Asia is expected to adopt a multi-currency stablecoin system. Many say Northeast and Southeast Asia are likely to build connected digital payment networks supporting several local currencies.