tl;dr
Japanese TradFi giant Sumitomo Mitsui Financial Group plans to launch a fiat-backed stablecoin on the Avalanche network in collaboration with Ava Labs and Fireblocks. The project aims to modernize cross-border payments by reducing reliance on traditional intermediaries like the SWIFT network. Initia...
Japanese TradFi giant Sumitomo Mitsui Financial Group is set to launch a fiat-backed stablecoin on the Avalanche network in collaboration with Ava Labs and Fireblocks. The project aims to modernize cross-border payments and reduce reliance on traditional intermediaries like the SWIFT network. Initial trials are scheduled for the second half of 2025, with a full-scale launch planned for next year. The stablecoin project, led by Ava Labs and Fireblocks, initially targets intercompany payments and is supported by technical build-out from Japanese IT firm TIS.
SMFG's involvement in blockchain has expanded, with previous initiatives exploring NFTs and stablecoin applications, aligning with Japan's advanced stablecoin policy and global trends of traditional finance institutions showing interest in stablecoin adoption.
Japan's stablecoin policy classifies fiat-backed stablecoins as "Electronic Payment Instruments," limiting issuance to regulated banks and licensed financial entities. Regulators are considering further reforms to bring digital assets under securities law, including protections against insider trading.
Globally, traditional finance institutions are increasingly interested in stablecoin adoption. Several major financial institutions, including Bank of America, are considering launching their own stablecoins. The stablecoin sector's market cap has grown to $234.6 billion, reflecting a 56% increase over the past year.
If successful, SMFG's stablecoin initiative could position Japan as a leader in institutional stablecoin issuance, showcasing the growing integration between legacy banking systems and blockchain infrastructure.