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.

Still, Japan’s central role in…