Sumitomo Mitsui Financial Group, Japan's second largest bank, has announced plans to issue its own stablecoin in collaboration with Ava Labs and Fireblocks.
SMBC's Stablecoin Plans
Sumitomo Mitsui Financial Group (SMBC) plans to launch its own stablecoin in partnership with Ava Labs and Fireblocks. Ava Labs, the developer behind the Avalanche blockchain platform, will provide the infrastructure, while Fireblocks will develop the token management system. The bank plans to begin testing in the second half of 2025, with a potential stablecoin launch early next year.
Regulatory Changes in Japan
Japan has made significant strides towards regulating stablecoins. In June 2022, the country amended the 'Payment Services Act', recognizing stablecoins as 'Electronic Payment Instruments'. Only licensed banks, service providers, and trust companies will be allowed to issue such stablecoins under these amendments.
Development Prospects in the US
While Japan is taking early steps towards stablecoins, US President Donald Trump has emphasized the importance of introducing dollar-backed stablecoins, urging lawmakers to create the necessary regulatory framework. The US stablecoin law, which aims to bring more clarity to stablecoins, is expected to be approved in about two months, potentially bringing more traditional banks into the stablecoin industry.
Initiatives like SMBC's stablecoin issue demonstrate the banking sector's growing interest in cryptocurrencies and the push towards adopting modern financial technologies.
