On September 17, JPYC Inc. suspended issuance reservations for its yen-pegged stablecoin on the Ethereum and Polygon networks due to a technical glitch in the minting process. The company, which is registered with the Japanese Financial Services Agency, has not yet provided a technical explanation for the disruption and is currently investigating the root cause.
The suspension coincided with the listing of JPYC on the South Korean exchange Upbit. While the token is designed to trade at a 1:1 ratio with the Japanese yen, the lack of new supply caused secondary market prices to spike to approximately 3 JPY. The platform typically caps issuance requests at 1 million JPY per transaction.
Upbit enabled trading against KRW, BTC, and USDT, but restricted deposits and withdrawals to the Ethereum network. This limitation prevented users holding JPYC on other supported chains, such as Polygon, Avalanche, and Kaia, from easily moving their assets to the exchange, further contributing to the price volatility and liquidity fragmentation.
Under normal conditions, arbitrageurs maintain the stablecoin's peg by minting new tokens at the 1:1 rate when the market price exceeds 1 JPY. Because the minting mechanism was offline, this pressure valve was disabled, allowing the price to deviate significantly from the intended value.
