Japanese banking giant SMBC explores stablecoins with Ava Labs and Avalanche's Fireblocks

Japanese banking conglomerate SMBC is considering stablecoin integration in collaboration with Ava Labs and Fireblocks

Sumitomo is the latest player in a string of companies exploring the booming stablecoin market, which has grown 50% in the past year to reach an estimated $230 billion.

Christian Sandor | Edited by Steven Alpher Updated April 2, 2025, 13:50 UTC Published April 2, 2025, 13:34 UTC

What is important to know:

• Sumitomo Mitsui Financial Group (SMBC) is joining forces with Ava Labs, Fireblocks, and TIS to explore the feasibility of introducing stablecoins in Japan.
• The main goal of the partnership is to create a framework for the issuance and circulation of stablecoins, including use cases such as settlements for tokenized financial assets.
• Stablecoins are becoming increasingly popular for international transfers as countries like Japan develop regulatory frameworks for the asset class.

Sumitomo Mitsui Financial Group (SMBC), one of Japan's leading banking groups, is the latest major financial institution to take an interest in stablecoins as the $230 billion market for the asset class rapidly expands amid tightening regulations around the world.

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According to a press release published on Wednesday, the banking group has entered into an agreement with Ava Labs, the developer of the Avalanche blockchain, digital asset security company Fireblocks and IT provider TIS to explore the possibility of commercializing stablecoins in the country.

The collaboration will focus on creating a framework for the issuance and circulation of stablecoins, analyzing regulatory requirements, and identifying practical applications, as stated in the press release. One of the key topics of interest is the use of stablecoins for the settlement of tokenized financial and real assets (RWAs), including government bonds, corporate debt, and real estate. A timeline for potential commercial implementation is not specified.

Stablecoins, which are cryptocurrencies pegged to fiat currencies like the Japanese yen or the US dollar, are a rapidly growing sector of cryptocurrency, growing nearly 50% to $228 billion in the last year. They have become an important part of global digital asset markets and are increasingly popular for remittances and payments, offering a faster and cheaper option than traditional banking systems. Organizations ranging from global asset manager Fidelity Investments to the US state of Wyoming are making moves to enter the market.

Read more: CoinDesk Weekly Roundup: Stablecoins, Stablecoins, Stablecoins

Japan has led the way in regulating stablecoins, recognizing them as electronic payment instruments in 2023 with an updated Payment Services Act. Most recently, stablecoin issuer Circle launched its $58 billion USDC token in the country with a subsidiary of financial giant SBI Holdings last month after receiving regulatory approval.

SMBC has previously been involved in digital asset projects, including the establishment of a digital asset custodian in 2022 and testing the issuance of security tokens in collaboration with Securitize in 2021.

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