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JPYC halts Ethereum and Polygon issuance reservations after glitch
Japan's regulated yen-pegged stablecoin paused new token minting on two major chains just as a Korean exchange listing sent demand soaring
JPYC Inc., the issuer of Japan’s yen-pegged stablecoin, suspended issuance reservations on both Ethereum and Polygon on September 17 after discovering a glitch in its minting process. The timing could not have been worse: the pause landed on the same day South Korean exchange Upbit began listing the token, creating a perfect storm of surging demand and frozen supply.
The result was predictable. Secondary market prices for JPYC, a token designed to trade at 1 JPY, reportedly spiked to approximately 3 JPY.
What happened and why it matters
JPYC Inc. initially paused issuance reservations only on Ethereum after confirming the glitch. Shortly after, the company extended the freeze to the Polygon network as well, signaling the problem was not isolated to a single chain deployment.
The company issued a public apology to users and said it was actively investigating the root cause. As of the announcement, no technical explanation for the disruption had been provided.
JPYC operates through its JPYC EX platform, which allows users to mint and redeem tokens at a 1:1 ratio with the Japanese yen. Each issuance request is capped at 1 million JPY per transaction, roughly $6,700 at current exchange rates. When that minting pipeline gets shut off, anyone wanting fresh JPYC has to turn to the secondary market, where prices are set by whatever buyers are willing to pay.
The Upbit listing opened JPYC trading against KRW, BTC, and USDT, though only Ethereum-based deposits and withdrawals were accepted. Trading kicked off at 18:00 KST after initial delays, pouring Korean retail demand into a market where new supply had been temporarily switched off.
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The Upbit listing adds fuel to the fire
With JPYC’s minting mechanism offline on both Ethereum and Polygon, the only tokens available were those already circulating. New demand from Korean traders had nowhere to go except into existing liquidity pools and order books, pushing prices well above the intended peg.
A stablecoin trading at three times its peg signals that the arbitrage mechanism keeping the token anchored to its reference currency has broken down. Normally, if JPYC trades above 1 JPY, arbitrageurs would mint new tokens at the 1:1 rate and sell them at a profit, pushing the price back down. With minting suspended, that pressure valve was effectively sealed shut.
JPYC’s regulatory position and multi-chain footprint
JPYC Inc. is registered with Japan’s Financial Services Agency for funds transfer businesses, making it one of a relatively small number of stablecoin issuers operating within a clear regulatory framework.
JPYC is deployed across several EVM-compatible blockchains, including Ethereum, Polygon, Avalanche, and Kaia. The multi-chain strategy is designed to give users options for lower transaction costs and faster settlement times. But it also means that a glitch affecting the issuance system can cascade across multiple networks, as happened here when the Polygon pause followed the Ethereum one.
The fact that Upbit only accepted Ethereum deposits and withdrawals for JPYC added another layer of complexity. Users holding JPYC on Polygon or other chains could not easily move their tokens to the exchange where demand was hottest, further fragmenting liquidity across the token’s ecosystem.