Hyperliquid price remains under corrective pressure after forming another macro lower high near key resistance. Failure to reclaim critical volume levels now raises the probability of a move toward $22 support.

Hyperliquid (HYPE) price continues to trade within a broader bearish market structure, with recent price action reinforcing downside momentum rather than signaling recovery. Despite intermittent relief rallies, the asset has repeatedly failed to shift trend direction, leaving sellers firmly in control.

The latest rejection at high timeframe resistance confirms that the market remains in a corrective phase, with attention now turning toward lower support zones.

Hyperliquid price key technical points

• Macro Structure: Consecutive lower highs confirm ongoing bearish trend.
• Key Resistance: $35 region aligns with VWAP and value area high confluence.
• Downside Target: Loss of volume support exposes $22–$21 demand zone.

Hyperliquid’s recent price action reflects a continuation of macro bearish conditions. The market has consistently formed lower highs across higher timeframes, preventing any meaningful shift in trend structure. Each recovery attempt has been met with selling pressure, reinforcing resistance zones and maintaining downside bias.

The most recent rejection occurred near the $35 resistance region, where multiple technical factors converged. This level aligned with both the Volume Weighted Average Price (VWAP) and the Value Area High, creating a strong confluence resistance zone. Price reaction at this level confirmed seller dominance, initiating a rejection that pushed Hyperliquid back toward equilibrium within the current trading range.

Following the rejection, price rotated toward the Point of Control (POC), the area representing the highest traded volume within the range. The POC often acts as a critical decision point between continuation and reversal. However, Hyperliquid failed to reclaim this level on a closing basis. Instead, the market lost acceptance above the POC, signaling weakening demand and confirming bearish continuation rather than stabilization.

The loss of the POC triggered the current corrective phase now unfolding across lower timeframes. When markets lose key volume support, liquidity often shifts toward deeper demand zones where stronger buyer interest may exist. In Hyperliquid’s case, the next major level sits near $22–$21 support, which represents a significant swing low and potential capitulation zone.

As long as price remains below the POC and beneath high timeframe resistance, downside pressure is likely to persist. A move toward $22 would represent a logical rotational target within the prevailing structure. While such a decline may appear bearish, it would also serve as an important test of long-term demand. Strong reactions from this region could form the foundation for a broader recovery attempt.

However, failure to hold the $21 swing level would carry larger structural implications. A confirmed breakdown would establish a new macro lower low, reinforcing the ongoing bearish trend and extending downside projections. This scenario would confirm continuation of the dominant market structure that has defined Hyperliquid’s price behavior for several months.

Volume dynamics currently offer little support for a bullish reversal. Buying participation remains limited, and rallies continue to lack follow-through strength. Without expanding bullish volume or a reclaim of lost resistance levels, upside attempts are likely to remain corrective rather than impulsive.

From a broader perspective, Hyperliquid remains caught in a corrective environment where sellers continue to dictate market direction. Until structural resistance is reclaimed, price action is expected to gradually rotate lower as the market searches for stronger liquidity support, even as Hyperliquid has surpassed Coinbase in total notional trading volume, signaling a broader shift toward decentralized perpetual futures trading.

What to expect in the coming price action

Hyperliquid is likely to continue trading lower while price remains below the Point of Control and $35 resistance. The $22–$21 region becomes the key area to monitor, where either a reversal reaction may emerge or a breakdown could confirm continuation of the macro bearish trend.

Citigroup (C) plans to launch institutional bitcoin custody later this year, part of a broader push to integrate digital assets into the bank’s traditional financial infrastructure.

Nisha Surendran, who heads Citi’s digital asset custody product buildout, described the initiative in a speech at the World Strategy Forum on Thursday as an effort to “make bitcoin bankable.”

That begins with institutional-grade key management and wallet infrastructure. But, Surendran said, the ambition is broader: to bring bitcoin into the same custody, reporting and control frameworks that clients already use for traditional assets.

“We will be offering our clients a single service model across crypto, securities and money,” said Surendran, who announced these plans during the World Strategy 2026 forum. Bitcoin positions, she said, will flow into the same reporting channels and tax workflows as equities and bonds.

Clients will be able to instruct transactions via SWIFT, APIs or user interfaces, she added. “From a client perspective, all they should care about is that they instruct us. We handle all the clearing and settlement complexity, and then we report back.”

Client demand

One of the reasons Citi is moving towards bankable bitcoin is because of client demand.

Citi has surveyed its clients, Surendran said, adding that they “don’t want to handle wallets and keys and one-time addresses.” Instead, they want exposure to bitcoin within familiar banking systems. Citi also wants to enable its clients to cross-margin crypto and traditional assets, Surendran said.

She described a future account structure in which multiple asset types sit under a single master safekeeping or custody account, including U.S. Treasuries, foreign bonds, tokenized money market funds, and bitcoin.

“The fact that all of these assets are accessible within the same account structure makes it easier to use them for cross-margining,” she said, including the possibility of using crypto assets at traditional exchanges or broker-dealers, and vice versa. Citi intends to build infrastructure to support that, she said.

It’s not surprising that banking giants are pushing further into the digital asset space. Institutional investors have been seeking exposure to the sector from traditional financial institutions for several years. What began with BlackRock offering exchange-traded funds to help more investors gain exposure has now spread to numerous banks and financial institutions, which continue to integrate their legacy financial services into the digital assets sector.

For example, Morgan Stanley, which oversees roughly $8 trillion in assets, has recently filed for bitcoin, Ethereum and Solana exchange-traded products and is exploring wallet technology across its wealth platform. It is also rolling out spot crypto trading on the E*TRADE platform and evaluating lending and yield opportunities tied to digital assets.

“We need to build this internally. We can’t just rent the technology,” the banking giant’s recently appointed head of digital assets, Amy Golenberg, said at the Strategy World event in a presentation prior to Surendran.

Building for a 24/7 market

Citi, which connects to more than 220 payment and settlement networks globally, has also begun with private permissioned blockchains before expanding to public networks as regulations became clearer and client demand increased. Something similar to what another banking giant, JPMorgan, has done with its JPM Coin.

One live use case is Citi Token Services for cash, a 24/7 blockchain-based network used to move money within Citi’s global system. “As we move into the world of 24/7 assets like bitcoin, we definitely need 24/7 U.S. dollars or 24/7 digital money,” she said, adding that Citi’s internal systems are being adapted for round-the-clock support.

The 24/7 market is also something institutional clients have been asking legacy financial institutions for. The New York Stock Exchange (NYSE) said last month that it plans to introduce an around-the-clock, blockchain-based trading venue for tokenized stocks and exchange-traded funds later this year.

NYSE’s main competitor in the U.S., Nasdaq, revealed in December that it was planning to facilitate nearly round-the-clock trading for stocks and exchange-traded products (ETPs), in a bid to match the increasingly global nature of financial markets and investor beh

The U.S. Department of Justice (DOJ) recently announced a major seizure of cryptocurrency linked to Chinese transnational criminal organizations. This move is part of a comprehensive strategy to dismantle international scams and financial crimes.

Central to this effort are the DC Scam Center and the Strike Force initiative, both of which play pivotal roles in identifying and apprehending criminals involved in cryptocurrency-related offenses. The Strike Force, in particular, is a collaborative law enforcement effort targeting these transnational networks, highlighting the global reach of these criminal enterprises.

“In only three months, we have made significant progress, freezing, seizing, and forfeiting cryptocurrency worth more than $580 million from these criminals. These criminals don’t care who you are, what you believe in, or what you ate for breakfast—all they want is to steal from good and honest Americans to line the pockets of Chinese organized crime,” said U.S. Attorney Jeanine Ferris Pirro.

This article was generated with the assistance of AI workflows.

Key Highlights

• Globalstar achieves $71.96M in quarterly revenue, exceeding analyst projections even with reported losses.

• Shares jump 4% as the company outlines ambitious growth plans through 2026.

• Fourth-quarter results demonstrate robust performance in satellite communications and IoT sectors.

• Revenue expansion continues despite per-share losses, indicating sustainable growth trajectory.

• Wall Street analysts maintain bullish stance with $66.50 average price target for GSAT.

Globalstar, Inc. (GSAT) delivered noteworthy fourth-quarter performance metrics, recording a loss of $0.07 per share while simultaneously demonstrating remarkable revenue expansion. The satellite communications firm witnessed its share price surge 4.00% to reach $60.19 in midday market activity. Although the quarterly losses exceeded analyst forecasts, the company’s robust revenue trajectory suggests a promising outlook for its operational future.

Globalstar, Inc., GSAT

Revenue Performance Exceeds Market Predictions

The satellite operator delivered quarterly revenue totaling $71.96 million, beating the Zacks Consensus Estimate by 0.23%. This represents substantial progress compared to the prior year’s figure of $61.18 million achieved by the company. While per-share losses were recorded, the firm’s capacity to generate above-forecast revenue demonstrates its sustained competitive advantage within the satellite communications marketplace. These results emerge as the organization continues enhancing its service revenue streams and Internet of Things functionalities.

Service revenue experienced a 17% year-over-year increase, primarily driven by enhanced wholesale capacity offerings and performance-based incentives. Furthermore, the introduction of advanced two-way satellite IoT technologies and the deployment of the RM200M module have significantly broadened Globalstar’s commercial footprint. This service revenue expansion corresponds with the company’s strategic initiatives to scale operations through cutting-edge satellite infrastructure and diversified IoT applications.

Strong Forward-Looking Growth Trajectory

Management forecasts 2026 revenue ranging from $280 million to $305 million, accompanied by an adjusted EBITDA margin hovering around 50%. The company’s sustained emphasis on broadening satellite IoT capabilities, combined with strategic partnerships across government and defense industries, establishes a foundation for substantial expansion. Globalstar intends to fortify its competitive standing while scaling operations with advanced-generation satellite infrastructure.

The organization’s forward guidance remains encouraging, bolstered by its diversifying portfolio of service solutions. Market success will largely depend on maintaining momentum within the satellite communications arena, especially through continued government and defense sector partnerships. Wall Street maintains an optimistic perspective, with consensus 12-month projections reaching $66.50, implying approximately 15% appreciation potential from current trading levels.

Wall Street Perspective and Growth Potential

The company’s latest financial disclosure has not diminished analyst confidence in the equity. Average analyst sentiment remains at “buy” level, with consensus price objectives set at $66.50. This bullish perspective persists despite current losses and competitive headwinds within the intensely contested satellite communications sector.

Globalstar’s 2026 success will depend on maintaining expansion momentum while navigating industry challenges. Moving forward, strategic priorities include scaling IoT capabilities and delivering consistent operational excellence across government and defense verticals. Through these initiatives, Globalstar appears well-positioned to strengthen its satellite communications market presence and sustain its upward growth path.

Bitcoin price has faced clear rejection near $69,000 resistance, reinforcing range-bound conditions and weakening short-term momentum. Loss of key volume support now increases the probability of a move toward $60,000.

Bitcoin (BTC) price action remains confined within a broader trading range, with recent attempts to test the upper boundary failing to gain traction. The rejection near the value area high signals that buyers lack the strength to sustain a breakout, shifting short-term bias back toward the downside. As structural weakness builds, traders are increasingly focused on whether range support can continue to hold.

Bitcoin price key technical points

• Major Resistance: $72,000 aligns with the value area high and range top.
• Structural Weakness: Price has lost the Point of Control and range mid support.
• Downside Risk: Breakdown below range support exposes $60,000.

Bitcoin recently approached the upper boundary of its established trading range, with resistance near $72,000 acting as the value area high. However, the rally into this region lacked conviction. Price barely tested the full extent of resistance before sellers stepped in, confirming that overhead supply remains dominant. Such shallow rejections often indicate underlying weakness rather than healthy consolidation.

The technical landscape deteriorated further following the loss of the Point of Control (POC), the level representing the highest traded volume within the current range. The POC typically functions as equilibrium between buyers and sellers. Losing this level on a closing basis suggests that the market is accepting lower prices, reinforcing bearish short-term structure.

Additionally, Bitcoin is now struggling to hold the range midpoint, with four-hour candle closes confirming weakness below this zone. Sustained trading beneath the range mid is often a precursor to deeper rotations toward range lows.

This behavior reflects classic bearish characteristics, where failed breakouts are followed by distribution and downside continuation, even as growing institutional demand and ETF inflows continue to support Citigroup’s planned 2026 crypto custody launch centered on Bitcoin integration.

From a market structure perspective, Bitcoin continues to print lower highs within the range environment. Without reclaiming lost volume support, upside momentum remains limited. Markets that fail to break above resistance frequently seek liquidity at lower boundaries, particularly when volume does not confirm bullish continuation.

The next critical level sits near $60,000, representing the range low and major support zone. A move toward this area would complete another full rotation within the broader consolidation structure. While range environments can persist for extended periods, repeated rejections at resistance increase the probability of eventual breakdown if demand weakens.

A decisive loss of the $60,000 range support would mark a significant structural shift, potentially accelerating bearish momentum and exposing deeper support levels. Until bulls reclaim the POC and reestablish acceptance above the range mid, Bitcoin remains vulnerable to further downside exploration.

Volume dynamics also reinforce caution. The recent rally attempt lacked expanding participation, and current price behavior reflects defensive positioning rather than accumulation. Without renewed buying pressure, continuation toward lower range support remains the higher-probability scenario.

What to expect in the coming price action

Bitcoin’s short-term outlook remains bearish while trading below the range mid and Point of Control. Continued weakness increases the likelihood of a move toward $60,000 support, where the next major structural reaction is expected to occur.

After weeks of aggressive selling pressure and a sharp liquidation cascade toward the $60K region, Bitcoin is now attempting to stabilize. The recent rebound from the $62K area has pushed the price back toward a technically critical level: the channel’s mid-boundary. This level has repeatedly acted as dynamic resistance throughout the downtrend, making the current reaction highly important for the short-term direction.

Bitcoin Price Analysis: The Daily Chart

On the daily timeframe, the bounce from $62K was technically clean. That zone acted as a strong demand and absorbed the aggressive selling pressure that triggered the previous flush. However, as the price approaches the channel’s mid-line, upside momentum is beginning to compress. The market is no longer impulsive — it is hesitating. Historically, this level has rejected multiple times, and until it is reclaimed on a daily closing basis, the broader structure remains corrective rather than bullish.

If Bitcoin can secure a strong daily close above this mid-boundary with follow-through buying, the structure shifts. In that case, the next logical magnet sits in the $75K–$80K supply region. That area contains prior distribution and would likely be the next test of strength. On the other hand, if price fails here and loses the $66K–$67K short-term support region, the market risks rotating back toward $62K. A breakdown below that level would reopen the path toward the lower boundary of the channel and confirm continuation of the larger downtrend.

BTC/USDT 4-Hour Chart

On the 4-hour chart, the structure is more constructive. The recent breakout above the triangle formation at $67K signaled short-term bullish pressure returning to the market. That breakout shifted momentum, but price is now compressing between the broken triangle trendline below and the channel mid-line of $70K. This creates a short-term decision range.

A controlled pullback toward the broken triangle resistance-turned-support would be technically healthy and could provide the base for another push higher. If that support holds, continuation toward $70K becomes increasingly probable. However, losing that level would invalidate the breakout and suggest the move was merely a relief rally.

Sentiment Analysis

From a liquidity perspective, the Binance BTC/USDT liquidation heatmap shows a notable cluster of short liquidations building above $70K. This area stands out clearly as a leverage pocket. Liquidity tends to act as a magnet, especially when positioned above price during a recovery phase. If Bitcoin manages to break above the channel mid-line and build acceptance, a move into that $70K region could trigger a short squeeze, accelerating upside volatility as overleveraged shorts are forced to close.

Overall, Bitcoin is in a transitional phase. The short-term structure has improved, momentum is stabilizing, and liquidity sits overhead. Yet the daily chart still shows price trapped beneath a major dynamic resistance within a broader descending channel. Until that level is decisively reclaimed, the larger structure remains fragile.

The next daily close around the channel mid-boundary will likely determine whether this rebound evolves into a squeeze toward $70K and beyond, or whether it becomes another rejection that pulls price back toward $62K and reactivates the dominant downtrend.

Crypto traders should keep an eye on key altcoins showing notable technical setups and potential catalysts. Market-moving events, including token unlocks, breakout patterns, and overbought conditions, could create short-term volatility.

BeInCrypto has analysed three such altcoins that are preparing for a volatile weekend.

Sui (SUI)

SUI faces a token unlock on March 1, when 53.82 million SUI, roughly 0.54% of total supply, will enter circulation. The unlocked tokens are valued at over $50 million. If market demand fails to absorb this supply, short-term price pressure may intensify.

SUI is trading at $0.935, below the $0.977 resistance level. The Squeeze Momentum Indicator signals compression, while the histogram reflects emerging bullish strength. If volatility expands upward and broader crypto sentiment remains positive, SUI could break $0.977 and target $1.060.

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

However, downside risks persist if investors sell into the unlock event. Failure to absorb new supply may push SUI below the $0.879 support level. A breakdown beneath that threshold could expose the next downside target near $0.778, invalidating the near-term bullish outlook.

Pippin (PIPPIN)

PIPPIN price resumed its upward momentum after a brief consolidation, setting a new all-time high at $0.904 in the past 24 hours. The token now trades at $0.679. Elevated trading activity reflects sustained speculative interest across the broader meme coin segment.

The bullish broadening descending wedge pattern remains intact on the daily chart. Price action continues approaching the projected 221% rally target. A decisive move above $1.000 would strengthen the breakout thesis. The Chaikin Money Flow indicator shows strong inflows, supporting continued upside momentum.

However, downside risk persists if holders shift toward profit-taking. A breakdown below the $0.666 support level would weaken the current structure. In that case, PIPPIN could decline toward $0.514. Losing that threshold may extend losses toward $0.385, invalidating the bullish outlook.

Stable (STABLE)

Another one of the altcoins to watch this weekend is STABLE, which is trading at $0.036 at the time of writing after setting a new all-time high of $0.039 during intraday trading. The Parabolic SAR remains below the candlesticks, confirming that the current uptrend is technically intact across short-term time frames.

Momentum indicators, however, suggest caution. The Money Flow Index has crossed into overbought territory, a level often associated with profit-taking and short-term reversals. If selling pressure emerges, the STABLE price could retrace toward $0.030 or potentially test deeper support near $0.025.

Should bullish momentum persist, a healthy cooldown may follow rather than an immediate decline. Similar consolidation occurred last week before further gains. STABLE could range between $0.039 and $0.030. A breakout above the current ATH may open the path toward $0.048, invalidating bearish expectations.

There is something unusual happening in the XRP price prediction space right now. For the first time in years, almost every major forecaster agrees on the same number. FXEmpire says $5. InvestingHaven says $5. Elliott Wave analysts say $5. Even the AI models cluster around $4 to $5 under base conditions. When every analyst agrees on a ceiling, that ceiling becomes exactly that.

The question smart investors are asking is not whether XRP can reach $5. It is what else they can hold alongside XRP that has not hit its ceiling yet.

Source: Coinmarketcap

FXEmpire breaks the XRP price prediction into three phases. Short term $2.50. Medium term $3.66. Bullish target $5.00, driven by ETF inflows and Ripple’s OCC banking license.

Source: SoSoValue

InvestingHaven forecasts a 2026 range of $1.58 to $4.25 with a bullish target of $5. A Monte Carlo simulation by 247 Wall St ran 10,000 scenarios and found only 10% exceeded $5.90. XRP at $5 is a 3.5x from $1.39. Good. But it is not early anymore.

Where XRP Stands Right Now

XRP trades at $1.39, down 61% from its $3.66 all time high. Spot ETFs have absorbed $1.24 billion since November. Whales holding 10 million to 100 million XRP now control 17.04% of supply after accumulating 3.17 billion tokens since October 2025.

The fundamentals are intact. A recovery to $5 is credible. But even at $5, a $10,000 XRP position becomes $35,000. That is a nice trade. It is not a life altering one.

The Pepeto Math That XRP Cannot Match

This is where the conversation shifts to a better opportunity for much bigger returns. It’s the new crypto presale Pepeto priced at $0.000000186. Six zeros. The presale has raised $7.33 million with 70% filled. Three products approaching launch. PepetoSwap for zero tax cross chain trading. Pepeto Bridge for cross blockchain transfers. Pepeto Exchange as the first meme coin listing hub.

The difference between XRP and Pepeto is not quality. It is timing. XRP already made its early investors rich. DOGE already made early believers millionaires. BONK turned fractions of a cent into portfolios. Every one of those tokens rewarded people who found them before the crowd. Pepeto is in that phase right now.

As an example, a $15,000 position in Pepeto at current price with a 150x return on listing becomes $2.25 million. That same $15,000 in XRP at $1.39 reaching $5 becomes $53,956. Both are legitimate investments. But only one of them changes your financial future.

On top of that, Pepeto staking at 211% APY means $15,000 generates $86.71 per day. That is $2,637 per month paid while you wait. Dual audits from SolidProof and Coinsult confirmed zero critical findings. An original Pepe cofounder created the project. The staking is the waiting bonus. The real play is the price.

The Consensus Tells You Where to Look Next

When every analyst agrees XRP tops at $5, that is valuable information. It tells you exactly how much runway is left. And it tells you to look for the asset with undefined upside. Pepeto at six zeros with three products and 70% filled is that asset.

Visit the Pepeto official website before the presale closes. The people who waited for consensus on DOGE paid $0.05 instead of $0.002. Do not wait for consensus on Pepeto.

Click To Visit Pepeto Official Website To Enter The Presale

FAQ

What is the XRP price prediction for 2026?

The analyst consensus targets $5.00 by year end. FXEmpire, InvestingHaven, and Elliott Wave models all converge around this level.

Can XRP reach $5 in 2026?

Yes. Reaching $5 requires sustained ETF inflows, passage of the Market Structure Bill, and a break above the $3.30 resistance. Multiple credible models support this target.

How much can Pepeto return compared to XRP?

XRP from $1.39 to $5 is a 3.5x return. Pepeto at $0.000000186 reaching a $50 million market cap delivers over 100x. The entry price math strongly favors presale stage tokens.

Where can I buy Pepeto?

Exclusively at the Pepeto official website presale. Not on any exchange yet. Listing is approaching with no vesting and no delays.

Disclaimer: This is a Press Release provided by a third party who is responsible for the content. Please conduct your own research before taking any action based on the content.

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 global finance has not been represented in the blockchain economy. That began to change after US President Donald Trump took office in January last year, which accelerated crypto policy discussions worldwide.

Like the US, Japan’s ruling party has stated its ambition to become a global center of Web3. Achieving that goal may depend on stablecoins capable of bringing the yen onchain. However, retail crypto activity in Japan remains relatively muted, even though the local industry is backed by some of the largest financial conglomerates and banks.

Japan’s crypto industry has the blessings of the government and conglomerates

Sanae Takaichi became Japan’s first female prime minister in October 2025. In just a few months in office, she dissolved the lower house for a snap election. Her Liberal Democratic Party (LDP) secured a two-thirds supermajority victory on Feb. 8, and lawmakers voted to reelect Takaichi for a second term 10 days later.

Startale Group CEO Sota Watanabe told Cointelegraph that she is widely seen as politically and strategically aligned with the Trump administration, which is accelerating local crypto adoption.

In April 2024, Takaichi’s LDP released a Web3 white paper to state its ambition to “make Japan the center of Web3.” The document outlined 11 crypto issues to address “immediately,” including income tax reform for individuals, stablecoins and security tokens.

Those priorities are also set in the blockchain strategy of SBI Group, which is one of the largest financial conglomerates in Japan, led by Yoshitaka Kitao.

“Kitao-san is the best person to commit to the crypto revolution in Japan because he created SBI under the evolution of the internet,” said Watanabe, whose Startale Group co-developed SBI’s Strium blockchain. The layer 1 aims to become the settlement infrastructure for institutional trading of tokenized equities and real-world assets (RWAs).

Kitao previously held executive positions at Nomura, Japan’s largest securities broker, and later at SoftBank alongside Masayoshi Son, who is second in Forbes’ Japan rich list. Kitao then founded SBI for SoftBank.

Related: Japan’s new crypto tax could wake ‘sleeping giant’ of retail investors

Watanabe claimed that SBI views crypto’s next onchain evolution as securities and stocks, though that requires the green light from the government.

“Right now, it is easy to make a derivative onchain, but to implement actual onchain dividends, actual voting rights of the stock, it needs to be regulation-compliant,” said Watanabe, who added that he is in talks with the Japanese government.

Also, dividends for onchain assets can’t be paid offchain, so a yen-backed stablecoin is needed.

Why a yen stablecoin matters

Japan’s interest rates and the yen carry trade are major forces that can move markets. The Bank of Japan raised interest rates in March 2024 from -0.1% to 0.1%, its first hike in 17 years. The following July, the central bank announced a more aggressive increase to 0.25%, rattling global markets and Bitcoin (BTC).

A yen-backed stablecoin could extend the carry trade into blockchain markets by bringing Japan’s low borrowing costs onchain.

For example, an investor could borrow a yen-denominated stablecoin at low interest rates. Those funds could then be used as collateral to borrow US dollar stablecoins, which can be deployed into decentralized finance (DeFi) lending, liquidity provision or other yield-generating strategies.

On Friday, Startale unveiled its own yen-backed stablecoin, JPYSC, targeting a second-quarter launch. According to Watanabe, the stablecoin is specifically designed to enable the yen carry trade onchain.

Related: Banks can’t seem to service crypto, even as it goes mainstream

“Once we implement the trust bank-backed stablecoin, it will become possible for global investors and institutions to execute the yen carry trade onchain,” he said.

Carry trades typically take time. The process can take one or two days to complete, as Japan’s and US’ business hours don’t overlap.

“But if we could do it onchain, we can do it 24/7 and instantly,” said Watanabe.

Theoretically, this could bring institutional yen borrowing to DeFi. But Justin d’Anethan, head of research at Arctic Digital, told Cointelegraph that an onchain carry trade won’t be impactful unless it comes with massive backers and a large market cap.

Watanabe told Cointelegraph that he has been in talks with the largest financial institutions in the US that are interested in carry trades and intraday swaps, though he declined to disclose names. He said that he has also been in contact with “top players” in DeFi.

The process still needs approval from Japanese authorities, while the regulatory treatment of stablecoins on bank balance sheets remains unresolved. Authorities such as the US Securities and Exchange Commission are still working to clarify capital and accounting requirements.

Japan’s crypto scene is accelerating, but retail is left out

A yen-backed stablecoin already exists in Japan in the form of JPYC, but it is primarily designed for payments. At the time of writing, its relatively small market capitalization of around $20 million makes it unsuitable for carry trades, which require deep liquidity and large borrowing capacity.

SBI isn’t the only financial institution exploring stablecoins in Japan. Three of the country’s largest banks — Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation and Mizuho — are reportedly looking to jointly issue a yen-pegged stablecoin.

Despite the interest from local traditional finance giants and the government, the retail industry activity is muted.

The slow retail adoption is often blamed on the up-to-55% tax levy crypto investors face. That could also be shifting. Japan is exploring the reclassification of crypto from a payment tool to a financial product, which would drop the crypto tax to 20% and allow for exchange-traded funds based on crypto.

The tax deduction reform is expected to start from 2028. This isn’t good enough, according to Watanabe.

“The Japanese government is very slow,” he said. “Given that the US is accelerating onchain finance, to catch up, tax deduction in 2027 is necessary.”

For decades, the yen has served as a global funding currency through carry trades, but it is largely absent in the crypto industry. Retail participation remains limited by hefty tax rules, but the government and institutions are already positioning the yen to operate inside blockchain-based capital markets.

Magazine: Is China hoarding gold so yuan becomes global reserve instead of USD?