Sumitomo Mitsui Financial Group (SMFG) to Launch Its Stablecoin on Avalanche Blockchain

The effort includes partnerships with Ava Labs, the creator of the Avalanche blockchain, and Fireblocks, a platform for digital asset custody and transfer.

Sumitomo Mitsui Financial Group (SMFG), the umbrella company for Japan’s second-largest bank, Sumitomo Mitsui Banking Corporation (SMBC), is preparing to introduce its own stablecoin.

The effort will also include partnerships with Ava Labs, the creator of the Avalanche blockchain, and Fireblocks, a platform for digital asset custody and transfer, according to Nikkei Asia.

The initiative hopes to enable immediate, 24/7 cross-border payments that could cut dependence on legacy infrastructure such as SWIFT, whose operations can be delayed by the differences in banking hours and intermediaries.

SMBC plans to collaborate with Japanese IT company TIS to perform pilot tests of the stablecoin project in the fourth quarter of 2025 or early in 2026. If trials are successful, live issuance should follow later in the year.

The step is a part of a broader scheme by SMBC to enhance cross-border payment systems through blockchain technology. In 2024, SMBC, Mitsubishi UFJ Financial Group (MUFG), and Mizuho Financial Group participated in “Project Pax.”

The project aimed to develop a cross-border payment system using blockchain technology, testing the transfer of Japanese yen and U.S. dollar funds between the three banks.

SMBC’s journey with blockchain technology began in February 2019, when its IT team completed a blockchain proof of concept for payment promises on the Marco Polo trade finance platform developed by R3.

SMBC was part of a group that included Commerzbank, BNP Paribas, Anglo-Gulf Trade Bank, Standard Chartered Bank, and Danske Bank. Subsequently, in July 2020, SMBC collaborated with Singapore-based Contour to digitize its trade finance offerings using blockchain technology.

The bank’s shift toward stablecoins is part of a wider trend in the financial industry, with big banks like JPMorgan and Citi exploring similar blockchain solutions for better and faster payment systems.