Japan’s debt market is causing increasing concern among global investors. The yield on Japan’s 30-year bonds exceeded 4% for the first time since the late 1990s, and the pressure on the country’s financial system became so strong that analysts are already discussing the risks of a chain reaction for global markets.
Against this backdrop, some crypto market participants unexpectedly returned to Ripple’s old thesis of “unlocking” global liquidity through XRP. The reason is simple: as rates rise and liquidity becomes scarce, banks start looking for ways to move capital between countries and currencies more quickly.
Japan’s Debt Market Under Heavy Pressure
The situation around Japanese bonds sharply deteriorated in the spring of 2026. The yield on 30-year bonds rose above 4% for the first time since the instrument was launched in 1999. At the same time, 10-year bonds approached the highs of the late 1990s.
This is an important signal for global markets. Japan remains one of the largest holders of US government debt and for decades has been a source of cheap liquidity for the global financial system.
Now this model is starting to break down.
The main reason was the gradual abandonment by the Bank of Japan of its ultra-loose monetary policy. Rising rates make the yen more expensive, and the long-standing carry trade strategy is starting to reverse.
Carry Trade Supported Global Markets for Decades
The mechanics were relatively simple. Investors borrowed cheap yen at minimal interest, then invested the money in higher-yielding assets around the world—from US bonds to the stock market and risk assets.
When rates in Japan began to rise, the flow of cheap money began to shrink. This creates the risk of a large-scale return of capital back to the Japanese financial system.
Analysts fear that if Japanese yields continue to rise, Japanese investors may begin to sell US bonds more actively. This process is already partially underway. In the first quarter of 2026, Japanese holders sold about $29.6 billion of US debt—the largest quarterly sales volume since 2022.
Pressure Could Shift to the US
The market fears a domino effect. If Japanese capital continues to leave US bonds, yields in the US could rise even higher.
This directly affects the cost of loans, mortgages, and business financing. Especially in an environment where the US market is already facing high rates and expensive debt servicing.
Additional pressure has also appeared at the long end of the US yield curve. The yield on 30-year US bonds has already approached 5%, fueling talk of possible problems with global liquidity.
Against this backdrop, investors have again begun to discuss infrastructure solutions for faster capital movement between countries.
Ripple Again Uses the “Trapped Liquidity” Theme
This is where part of the market recalled Ripple’s old strategy. The company has long promoted the idea of reducing banks’ dependence on nostro and vostro accounts.
Currently, international transfers require banks to hold huge sums in foreign currencies around the world in advance. These funds are effectively frozen within the financial system and do not participate directly in the economy. According to various estimates, tens of trillions of dollars are held in such accounts.
Ripple is trying to solve this problem through its On-Demand Liquidity system, where XRP is used as an intermediary asset for instant currency exchange between countries.
The scheme works as follows: a bank converts local currency into XRP, transfers the tokens via blockchain, and immediately exchanges them for the required currency on the recipient’s side. The entire process takes seconds instead of several days.
XRP Again Pitched as an Infrastructure Asset
Ripple supporters believe that this model can free up some of the capital that is currently locked inside the international banking system.
Amid rising rates, this argument has started to sound louder again. The more expensive liquidity becomes, the greater the interest in systems that allow for a reduction in frozen funds and faster settlements.
Ripple claims that pilot projects have already shown a reduction in international transfer costs by 40–70% compared to traditional infrastructure.
The topic of XRP is now being discussed especially actively after banks’ growing interest in asset tokenization, central bank digital currencies, and blockchain settlements.
But Mass Adoption Is Still Far Off
Despite a new round of discussion, Ripple still faces several serious limitations. The main problem is regulation and trust from major financial organizations.
Banks remain extremely cautious about using public crypto assets within international settlement systems. Especially after a series of regulatory disputes around Ripple in the US in recent years.
In addition, many countries are now developing their own digital currency systems and internal blockchain platforms, which could potentially compete with Ripple’s infrastructure.
Therefore, for now, XRP remains more of a potential element of the future financial system than a full-fledged standard for international settlements.
The Market Starts Looking at Infrastructure More Broadly
The situation around Japan has shown how fragile the global liquidity system remains. Rising yields in one country are already starting to affect bonds, currencies, and the cost of money worldwide.
Against this backdrop, talk of modernizing financial infrastructure is becoming increasingly louder. Blockchain, asset tokenization, and instant international settlements are gradually moving beyond the crypto market and are now being discussed as part of the global financial architecture.
That is why XRP and similar projects are once again in the spotlight, even despite ongoing debates about their real-world application.
What’s Next?
In the coming months, investors will closely monitor the actions of the Bank of Japan and the dynamics of US bond yields. If Japanese capital continues to return home, pressure on global markets may intensify.
At the same time, interest will grow in systems that help move liquidity between countries more quickly and reduce dependence on traditional banking infrastructure.
For Ripple, this is a chance to bring XRP back to the center of the discussion about the future of international settlements. But the path to mass adoption of the technology remains difficult and still depends heavily on regulators and major banks.
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