SMBC Partners with Ava Labs for Stablecoin Launch

SMBC, Japan’s second-largest financial group, is partnering with Ava Labs and Fireblocks to launch a stablecoin built on the L1 blockchain Avalanche. 

Each partner will take on a specific role in the project:

• Ava Labs will provide the core technology
• Fireblocks will handle the development of the token management system 

SMBC will start trials in 2025, with a full launch expected the following year.

The stablecoin initiative aims to:

• Simplify and reduce the cost of interbank transfers 
• Lower fees and other operational expenses
• Shorten transaction processing times (compared to existing systems such as SWIFT)

Stablecoin Regulation in Japan and the Global Context

Japan has taken a proactive approach to regulating the stablecoin market. For instance, in 2022, the country’s parliament recognized fiat-backed stablecoins as electronic payment instruments. Under the law, only licensed banks and trust companies can issue such tokens. 

This legal framework creates opportunities for SMBC and other major banks, including Mitsubishi UFJ and Mizuho, which are also preparing to launch stablecoin projects. 

However, SMBC stands out with a greater chance of success due to its practical experience. The bank has already been involved in key initiatives such as: 

• Token Business Lab (2022)
• A joint project with HashPort (focused on NFTs and identity verification tokens).

Japan continues to follow global trends. Recently, U.S. President Donald Trump highlighted the importance of stablecoins and called for a clear regulatory framework for these assets.

How SMBC Could Transform the Stablecoin Market in Japan and Beyond

SMBC is actively working to integrate stablecoins into its financial system. In light of Japan’s recent regulatory developments, this move could represent a major breakthrough for the country’s presence in the crypto industry. Moreover, launching such a product would also help strengthen SMBC’s position in the global digital asset market.

The bank’s strategy reflects the increasing attention stablecoins and digital currencies are receiving from major players around the world. 

If SMBC succeeds, it would be the first to launch a stablecoin under Japan’s regulatory framework. This could set a positive precedent, create new opportunities for investors, and encourage healthy competition.