UPBOND and JPYC Launch Instant Duty-Free Stablecoin Refunds on Avalanche for International Visitors in Japan

Japan to use digital currency for international tourism consumption tax refunds 1 November 2023 Digital payments will be a new way for international tourists to buy products in Japan following the launch of a digital currency. Japanese Web3 infrastructure provider UPBOND has partnered with three Japanese entities – Japan Tax Free, the issuer of the JPYC crypto, and stablecoin platform JPYC Inc. – to bring Japanese tourists a new way of receiving consumption tax refunds. Starting 1 November 2026, eligible international tourists will be able to receive consumption tax refunds in the yen-linked stablecoin JPYC. Japan Tax Free’s JAPAN Refund system will work together with UPBOND’s wallet creation, authentication and transaction-tracking infrastructure to enable the refunds. The Japan-based stablecoin transactions will use Avalanche’s C-Chain blockchain network. Under the new scheme, international tourists will pay the total cost of goods first, with the consumption tax refunded afterwards once customs clears the goods being exported. The change is part of a broader overhaul of Japan’s consumption tax exemption system, with the tax exemption now to be paid at the check-out rather than after export.

How the JPYC Tax Refund Process Will Work

Under the new arrangement, eligible international visitors will be able to receive their consumption tax refunds directly into a digital wallet in JPYC rather than relying exclusively on conventional refund channels.

The process involves three principal stages:

Shopping and payment: Visitors purchase eligible goods at participating tax-free retailers and initially pay the full price, including Japan’s consumption tax.
Customs verification: Before leaving Japan, travellers present their purchased goods for customs inspection. Authorities verify that the goods are being exported rather than retained for domestic use.
Digital refund: Once customs confirmation and the necessary reconciliation procedures are completed, the corresponding refund is transferred in JPYC to the traveller’s registered digital wallet.

The new system requires eligible goods to be taken out of Japan within 90 days of purchase. Customs verification is therefore an essential part of the refund process.

Japan’s revised rules also establish a minimum qualifying purchase threshold of ¥5,000 before consumption tax per shop per day. Travellers should check product eligibility and individual retailer procedures before completing transactions.

Importantly, the JPYC arrangement is being introduced through Japan Tax Free’s refund service. It should not be confused with a requirement that every tax-free retailer or refund provider must issue refunds in cryptocurrency. The government framework allows refunds through participating shops or authorised refund service providers, with the available payment methods depending on their arrangements.

UPBOND Provides the Digital Wallet Infrastructure

UPBOND is responsible for connecting the refund operation with the digital wallet experience. Its technology covers wallet creation, user authentication, integration with Japan Tax Free’s refund infrastructure and confirmation of transaction status.

One important feature is the provision for visitors who do not already own a cryptocurrency wallet. Through UPBOND’s infrastructure, eligible travellers can establish a receiving wallet and complete the necessary authentication procedures.

This removes the requirement for every participating visitor to have an existing Web3 wallet before using the service.

Japan Tax Free will continue to manage the shopping refund operation, while JPYC serves as the digital currency used for the payout. The three organisations therefore have distinct responsibilities within the arrangement.

The transfer infrastructure will operate on the Avalanche C-Chain, which supports smart contracts and digital asset transfers.

Blockchain records can provide transaction visibility and allow transfers to be checked. However, the final refund amount and the time taken to receive it remain subject to the service’s processing requirements and applicable conditions.

Why Japan Is Replacing Its Existing Tax-Free Shopping System

The JPYC initiative arrives alongside Japan’s broader reform of its tax-free shopping framework.

Until 31 October 2026, eligible international visitors can generally purchase qualifying goods at participating tax-free shops without paying consumption tax at the point of sale.

From 1 November, the system will move to a refund-based arrangement. Shoppers will initially pay the full tax-inclusive price, with the consumption tax equivalent returned after customs confirms that eligible purchases are being taken out of the country.

The reform is intended to strengthen oversight of tax-free purchases and address misuse, particularly the domestic resale of goods purchased under the existing exemption arrangement.

Under the revised process, retailers and refund service providers will need to manage the information and procedures required to complete eligible refunds.

For international visitors, this means that shopping in Japan will involve an additional departure-stage procedure. Travellers should retain their purchase information, keep eligible goods accessible for inspection and allow sufficient time for customs formalities before boarding their flights.

Tokyo, Osaka and Kyoto Remain Important Shopping Destinations

The revised refund framework will be relevant to international visitors shopping across Japan’s major tourism centres.

Tokyo remains a leading destination for international retail tourism, with districts such as Ginza, Shibuya, Shinjuku and Akihabara attracting visitors interested in fashion, electronics, cosmetics and Japanese speciality products.

Ginza is recognised for luxury shopping and international retail brands, while Shibuya and Shinjuku offer extensive department stores, fashion outlets and lifestyle retailers.

In Osaka, Dotonbori, Shinsaibashi and Namba attract visitors with shopping complexes, restaurants and entertainment venues. The city also provides access to Kansai International Airport, an important international gateway for travellers visiting western Japan.

Kyoto offers a different shopping experience, with traditional crafts, ceramics, textiles and speciality food products available alongside modern retail establishments.

International travellers visiting these destinations will need to understand the revised refund procedure when purchasing eligible goods from participating retailers.

JPYC Offers an Alternative to Conventional Refund Payments

The use of JPYC introduces a different approach to delivering consumption tax refunds to international visitors. Traditional refund arrangements can involve card reversals, international transfers and processing charges, depending on the payment provider and the traveller’s financial institution.

According to UPBOND, transferring JPYC directly to a visitor’s wallet could reduce fees associated with conventional refund transfers while providing a record of the transaction on the blockchain.

JPYC is a yen-denominated stablecoin issued by JPYC Inc. and designed to maintain a value linked to the Japanese yen. Its use gives visitors the option of holding their refund in a digital form rather than immediately receiving a conventional card or bank refund.

Travellers may also consider retaining their JPYC for a future visit to Japan, subject to wallet accessibility, applicable service conditions and the availability of merchants or platforms accepting the stablecoin.

However, receiving JPYC does not automatically mean that visitors can spend it at ordinary Japanese retail outlets. Its use, transfer, conversion and redemption depend on the services and platforms available to individual wallet holders.

UPBOND Plans to Extend Refund Services Through Agentic Wallet

UPBOND is also preparing to extend its refund infrastructure through its conversational AI-driven Agentic Wallet.

The planned integration aims to allow travellers to access travel-related services and check tax refund progress through a conversational interface. Instead of navigating multiple platforms to establish whether a transaction has been completed, users could eventually receive refund-status information through chat.

The company intends to connect the refund process with its wider wallet experience, creating additional opportunities to integrate digital payments into international travel.

However, this feature is planned for a later stage. It is separate from the JPYC refund service scheduled to begin on 1 November, and UPBOND has not confirmed a specific release date for the Agentic Wallet integration.

What International Visitors Should Know Before Travelling

The revised tax-free shopping system will affect eligible purchases made from 1 November 2026. Visitors arriving in Japan should understand the new process before planning major shopping trips.

Travellers should:

Check whether retailers participate in the revised tax-free refund programme.
Confirm which payment methods are available for receiving refunds.
Keep purchased goods accessible for customs inspection.
Complete customs verification before departing Japan.
Check wallet creation and authentication requirements if selecting JPYC.
Review any applicable transaction, conversion and redemption charges.

Keep in mind that confirmation at customs does not mean an instant credit to the wallet as confirmed by Japan Tax Free and UPBOND. Reconciliation and the refund process still have to be handled before the JPYC reaches the wallet of origin. The option of using stablecoin for refunds provides another digital method of payment for international shoppers in Japan as it shifts to its new consumption tax system.

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