Convertible JPY Token (CJPY) is a stablecoin equivalent to the Japanese yen issued by the Yamato protocol. Its value is backed by excess collateral in ETH with a minimum ratio of 130% and maintained through an arbitrage redemption mechanism at a fixed price of 1 yen. It is issued through a decentralized application (DApp) that does not require user identification and operates on a one-time fee model instead of interest, shifting the risk of collateral liquidation to the protocol itself and the redemption system, rather than to individual borrowers.

The stability of the CJPY peg is ensured by game theory and arbitrage opportunities: if the price falls below 1 yen, demand arises to pay off debt or redeem collateral at par; if the price exceeds parity, new CJPY is issued for sale on the market. The protocol is governed by a DAO using the native YMT token.