According to the news of Japan’s local news agency Nikkei, Japan’s second largest bank, Sumitomo Mitsui Financial Group (SMBC), has taken action to issue a stablecoin.
Accordingly, SMBC plans to launch its own stablecoin in collaboration with Ava Labs and Fireblocks.
Ava Labs, the team behind Avalanche, will provide the blockchain 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.
While Japan has taken important steps towards stablecoins, stablecoins were regulated early in the country. In June 2022, Japan made amendments to the “Payment Services Act” by recognizing stablecoins as “Electronic Payment Instruments”. It was stated that only licensed banks, service providers, and trust companies would be allowed to issue such stablecoins under these amendments.
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 for this. With the stablecoin law in the US that aims to bring more clarity to stablecoins and is expected to be approved in about two months, more traditional banks are expected to join the stablecoin industry.
*This is not investment advice.
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