Japan's Sumitomo Mitsui Banking Corporation (SMBC), the nation's second-largest bank, is set to explore the launch of its own stablecoin.
Japan's Sumitomo Mitsui Banking Corporation (SMBC), the nation's second-largest bank, is set to explore the launch of its own stablecoin through a partnership with blockchain firm Ava Labs and crypto security provider Fireblocks.
According to a report from Nikkei, the bank intends to begin experiments in the latter half of 2025, with a potential launch date targeted for 2026.
Ava Labs, known for its Avalanche blockchain platform, will focus on establishing the foundational blockchain technology for the stablecoin. Fireblocks is slated to develop the management system necessary for the tokens. The initiative also includes collaborating with local IT firm TIS to facilitate the project’s experimental phase.
The move toward stablecoins comes as financial institutions recognize their potential to enhance cross-border payment efficiency and lower transaction costs.
Traditional systems like SWIFT often incur higher fees and prolonged processing times due to intermediary involvement.
SMBC has previously engaged with Web3 technologies, launching the Token Business Lab alongside HashPort in 2022, aimed at providing blockchain services, particularly in non-fungible tokens (NFTs). Also in 2022, the bank participated in pilot programs for soulbound tokens intended for identity verification.
Regulatory frameworks in Japan are evolving, with the Payment Services Act amendments passed in June 2022 recognizing fiat-pegged stablecoins as "Electronic Payment Instruments." These regulations stipulate that only licensed banks, service providers, and trust companies may issue such stablecoins.
In the United States, discussions around stablecoin regulation are gaining momentum, with notable figures, including President Donald Trump, advocating for a clear legal framework to support dollar-backed stablecoins.
As the market for stablecoins grows—boasting a total market capitalization of approximately $234.6 billion—more traditional banking institutions are expected to consider entering this emerging sector.
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