SMBC inks MOU to explore commercialization of stablecoins

They will explore technical, regulatory, and market infrastructure requirements for it.

Sumitomo Mitsui Financial Group (SMFG), Sumitomo Mitsui Banking Corporation (SMBC), TIS, Inc., Ava Labs, and Fireblocks have signed a memorandum of understanding (MOU) to initiate joint discussions on the potential utilization of stablecoins for future commercialization.

The agreement will see SMBC, Fireblocks, Ava Labs, and TIS collaborate to develop a framework for stablecoin issuance and circulation. This includes exploring technical, regulatory, and market infrastructure requirements both in Japan and further afield.

They will also examine potential use cases that leverage the defining features of stablecoins, including as a settlement method for tokenized financial and real-world assets (RWAs), such as government and corporate bonds, as well as real estate, according to a press release.

With the amended Payment Services Act taking effect in June 2023, stablecoins have been officially recognized as electronic payment instruments in Japan.

This opens the door for financial institutions and businesses to explore their use for remittances and settlements, SMBC said in a statement.

This collaboration between SMBC Group and TIS, Ava Labs, and Fireblocks, which have been advancing initiatives in digital assets both domestically and internationally, is seen as an important step toward supporting the enhancement and efficiency of financial functions in Japan, it added.