SMBC to Launch Stablecoin Project in Partnership with Ava Labs and Fireblocks

SMBC to Launch Stablecoin Project in Partnership with Ava Labs and Fireblocks

Sumitomo Mitsui Financial Group (SMFG), the parent company of Japan’s second-largest bank, SMBC, is preparing to step into the stablecoin space through a strategic collaboration with Ava Labs and Fireblocks, according to a report by Nikkei.

The initiative will leverage the blockchain expertise of Ava Labs, the developers of Avalanche, to lay the technological foundation for the stablecoin. Fireblocks, known for its crypto security infrastructure, will be responsible for developing a robust token management system.

SMFG aims to begin testing the project in the latter half of 2025 in partnership with domestic IT firm TIS, with the potential for a full-scale stablecoin issuance the following year.

Stablecoins are increasingly being viewed as a transformative solution for financial institutions, particularly in cross-border payments. They promise reduced transaction costs and faster settlements by eliminating intermediaries that are typically involved in the SWIFT network.

This isn’t SMBC’s first foray into the world of Web3. In 2022, the financial group launched Token Business Lab with blockchain startup HashPort to explore services centered around NFTs. That same year, the partnership piloted the issuance of “soulbound tokens”—non-transferable NFTs designed for identity authentication.

Moreover, SMBC revealed plans in 2023 to trial a cross-border stablecoin initiative alongside fellow Japanese banking giants Mitsubishi UFJ Financial Group and Mizuho Financial Group.

Japan has been proactive in regulating digital assets. Amendments to the Payment Services Act passed in June 2022 formally recognized fiat-pegged stablecoins as “Electronic Payment Instruments.” Under the law, only licensed banks, money transfer agents, and trust companies can issue such assets.

On a global scale, interest in stablecoins is accelerating. In the U.S., former President Donald Trump has thrown his support behind dollar-backed stablecoins, advocating for regulatory clarity to foster growth in the sector. Bank of America CEO Brian Moynihan has also expressed readiness to enter the stablecoin business, pending legal approval.

According to DeFiLlama, the total stablecoin market capitalization has soared to $234.6 billion, representing a 56% increase over the past year—a sign that traditional finance’s integration with blockchain technology is only just beginning.