The Japanese Tradfi giant Sumitomo Mitsui Financial Group announced plans to launch a Fiat-Stunder Stablecoin on the Avalanche Network in collaboration with the American AVA Labs and Blockchain Infrastructure Firms Firebacks.
The project, currently in the planning phase, is intended to modernize cross -border payments by reducing the dependence on traditional intermediaries such as the Swift Network, according to local media report.
The first tests are limited to Intercompany payments and are planned for the second half of 2025, while a complete launch is planned for next year.
AVA Labs will lead the blockchain development for the Stablecoin infrastructure, while Fireblocks has the task of using token issue, security and management systems. The Japanese IT company TIS will support the technical build-out during the experimental phase.
The wider digital push of Japan
SMFG is the parent company of the second largest bank in Japan, Sumitomo Mitsui Banking Corporation (SMBC), which manages about $ 1.7 trillion to assets.
The lender has gradually increased his involvement in Blockchain in recent years. In 2022, the bank has co-lanced Token-Business Lab with Hashport to explore company use for NFTs, including experiments with non-transferable Identity Stokens.
In 2023, SMBC joined the other Bank Giants of Japan – Mitsubishi UFJ and Mizuho – in a pilot aimed at Stablecoin requests for international settlement.
Japan’s Stablecoin policy is one of the most advanced worldwide. Legislation adopted in 2022 Formally classified Fiat-Stundered Stablecoins as ‘electronic payment instruments’, which limits the issue to regulated banks and recognized financial entities.
Regulators now weigh further reforms that would bring digital assets under securities legislation, including protection against prior knowledge trade.
Growing Tradfi Interest in Stablecoins
Worldwide, traditional financial institutions signal a growing interest in the acceptance of the Stablecoin, in which various large financial institutions are considering launching their own stablecoins.
In the US, the momentum of the regulations, with recent phone calls from President Donald Trump, builds legal clarity at Dollar-Peg inkens. Bank of America has recently shown interest in entering the Stablecoin market, depending on approval of the regulations.
The Stablecoin sector has continued its exponential growth in the midst of rising adoptions worldwide. Market capitalization is now $ 234.6 billion, an increase of 56% compared to the past year.
If it is successful, the initiative of SMBC Japan could position as a leader in institutional Stabilein issue, while the growing convergence between older banking systems and blockchain infrastructure is emphasized.
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