Japanese financial titan SMBC is reportedly preparing to launch a stablecoin on the Avalanche blockchain.
Sumitomo Mitsui Financial Group (SMFG), one of Japan's leading financial institutions, has revealed plans to issue a stablecoin, marking a significant step towards modernizing the nation's financial infrastructure.
The project, a collaboration with Ava Labs, the developer behind the Avalanche blockchain platform, and Fireblocks, is part of SMFG's broader strategy to enter the stablecoin market. This move comes amid Japan's evolving regulatory environment and growing interest in digital currency innovations.
SMFG's stablecoin project is set to leverage the Avalanche ecosystem, indicating a focus on scalable and efficient blockchain technology. The Avalanche blockchain supports both permissionless and permissioned chains as subnets, providing a flexible platform for SMFG's stablecoin.
In terms of market position, SMFG joins other major players such as SBI Holdings in exploring stablecoin issuance. This trend reflects Japan’s national effort to modernize payments, improve cross-border remittances, and enable faster, cheaper corporate settlements.
While the exact backing assets and issuance details of SMFG’s stablecoin have not been fully disclosed, peer projects like JPYC (JP Morgan's blockchain-based bank account) will be backed by cash deposits and Japanese government bonds, aiming for a 1:1 peg to the yen. Given the regulatory environment and the involvement of Ava Labs, SMFG’s stablecoin likely follows similar principles of collateralization and compliance.
SMFG is also participating in Project Pax, a stablecoin trial with MUFG and Mizuho, and is a backer of Progmat, a Japanese tokenization platform. The primary use case for SMFG's stablecoin is to enable corporates to move money around the world instantly and 24/7, bypassing Swift.
As the project progresses, SMFG is working with Japanese IT firm TIS and plans to conduct experiments in Q4 of 2021 or Q1 of 2022. The live issuance of the stablecoin by SMFG is expected to take place in the following year.
Deutsche Bank recently confirmed its investment in Partior, a cross-border blockchain payment system co-founded by DBS, JP Morgan, and Temasek, highlighting the accuracy of the report about SMBC's (SMFG's parent company) involvement.
In conclusion, SMFG’s stablecoin project is underway, capitalizing on Japan’s regulatory openings and technological trends to develop a yen-backed stablecoin aimed at enhancing payment efficiency and expanding digital financial services domestically and potentially internationally. Detailed public disclosures on its launch timeline and specific mechanics remain limited as of August 2025.
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