Sumitomo Mitsui Financial Group (SMFG), the parent company of Japan’s second-largest bank SMBC, is preparing to launch a stablecoin in partnership with blockchain firm Ava Labs and crypto infrastructure provider Fireblocks, according to a report by Nikkei on Tuesday.
Ava Labs, the developer behind the Avalanche blockchain, is expected to build the technological foundation for the stablecoin, while Fireblocks will handle token management and security systems.
The project is currently in its planning phase, with trials slated to begin in the second half of 2025.
SMBC Could Launch Stablecoin as Early as Next Year, Report Says
If successful, SMBC could issue the stablecoin sometime next year, the report stated.
The stablecoin initiative aims to improve cross-border payments by reducing reliance on intermediaries, such as those used in the SWIFT network, which often lead to higher fees and delays.
A stablecoin could offer banks a faster and more cost-effective alternative for international transactions.
SMBC is working with local IT firm TIS to support the experiment and development phase of the project.
This isn’t SMBC’s first venture into blockchain. In 2022, the bank partnered with HashPort to form Token Business Lab, offering NFT-related services.
Later that year, the collaboration tested “soulbound tokens,” a form of non-transferable NFT for identity verification purposes.
In 2023, SMBC also revealed a joint pilot project with Mitsubishi UFJ Financial Group and Mizuho Financial Group to explore cross-border stablecoin use cases.
Japan has already laid regulatory groundwork for stablecoins.
In 2022, the country’s parliament amended the Payment Services Act to define fiat-backed stablecoins as “Electronic Payment Instruments,” limiting issuance to licensed banks, trust companies, and registered service providers.
Internationally, momentum is also building. In the U.S., President Donald Trump has called for regulatory clarity on dollar-backed stablecoins, a move that could open the door for more traditional financial institutions.
Bank of America CEO Brian Moynihan recently stated the bank would enter the stablecoin market if allowed by law.
According to DefiLlama, the total market cap of stablecoins currently stands at $234.6 billion, reflecting a 56% increase year-over-year.
Japan Moves to Classify Crypto as Financial Products Under Securities Law
Japan is preparing a major regulatory shift by planning to recognize cryptocurrencies as financial products under the Financial Instruments and Exchange Act.
The Financial Services Agency (FSA) aims to submit a bill by 2026, which, if passed, would bring digital assets under the same rules as traditional securities, including laws against insider trading.
The move marks a significant departure from the current regulatory environment, where crypto operates with limited oversight.
The FSA has been developing the proposal in collaboration with legal and financial experts, reflecting a broader global push to integrate crypto into existing financial systems.
In parallel, U.S. regulators are also advancing crypto oversight: the CFTC has announced equal treatment for digital asset derivatives, while the FDIC and OCC have relaxed requirements for banks engaging with crypto.
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