Sumitomo Mitsui Financial Group to Develop a Stablecoin

Sumitomo Mitsui Financial Group is working on developing a stablecoin in collaboration with Ava Labs and FireBlocks.

Sumitomo Mitsui Financial Group (SMFG) is developing a stablecoin in collaboration with Ava Labs, FireBlocks, and systems company TIS. Ava Labs will provide the blockchain infrastructure, FireBlocks will create the digital asset management system, and TIS will design the technological foundation.

The testing phase will begin in the second half of the 2025 fiscal year, after which they will assess its implementation for business payments.

The project also aims to integrate an ATOM token management system, as part of broader efforts to expand the use of blockchain in capital markets.

Earlier this year, SMFG announced plans to invest in blockchain startups through its venture capital arm. The financial group is actively exploring the potential of Web3 technologies and seeking to forge strategic partnerships within the industry.

Earlier this year, SMFG also announced an investment in a venture capital fund that focuses on blockchain startups in Japan, China, Southeast Asia, India, and the United States.

As institutions increasingly venture into the crypto sphere, interest in engaging with blockchain startups is on the rise. These startups are developing innovative solutions in various sectors, presenting opportunities for financial institutions to invest and integrate new technologies into their operations.

In other news, crypto market analysis firm Nansen notes that the lack of demand for AVAQs despite a 70% increase in stablecoin supply on Avalanche over the past year may indicate a bottoming in the crypto market before June.

Stablecoin supply on Avalanche has surged from $1.5 billion to $2.5 billion by the end of March, according to Nansen's analysis. A significant portion of these funds are being bridged in the form of Tether, and they are not yet actively used in decentralized finance applications.

Despite the liquidity expansion, the token price has trended downwards, with AVAQ losing nearly 60% of its value over the past year.

The lack of integration into lending, swaps, or as collateral on Avalanche has prevented the liquidity expansion from translating into a price increase for the token.

However, Nansen analysts point out that the lack of demand for AVAQs may be a sign that the crypto market could be bottoming out.

The crypto market has generally shown weakness in recent weeks due to uncertainty caused by the trade measures being implemented by the U.S.

President Donald Trump’s administration will announce new import tariffs on April 2, which has pressured both the crypto industry and traditional financial markets.

But Nansen analysts believe that the outlook on trade negotiations will become clearer by June, which could help to stabilize the crypto market.

In addition, the increased institutional interest in crypto in recent months could also help to drive a recovery in the market. Several large institutions, such as BlackRock and Fidelity, have announced plans to offer crypto products and services to their clients.

This interest is being driven by the potential of crypto to provide new investment opportunities and to disrupt existing financial services.

As the industry continues to innovate and institutions become more involved, the future of crypto remains bright.