SMBC Partners with Ava Labs to Pilot a Stablecoin Initiative on the Avalanche Network

Japan's second-largest bank, SMBC, is moving forward with plans to launch its own stablecoin through collaborations with key blockchain industry players. According to a Nikkei report, SMBC will work alongside Ava Labs, the development team behind Avalanche (AVAX), and Fireblocks to spearhead this innovative project. The initiative is positioned as part of a broader trend of financial institutions incorporating blockchain technology to enable more efficient, cross-border money transfers. The bank aims to conduct trials in the fourth quarter of 2025 or early 2026, with live issuance expected later in the year if the pilot proves successful. This latest endeavor follows SMBC's previous blockchain experiments including a 2019 proof of concept for payment commitments via the Marco Polo trade finance platform, and a subsequent collaboration with Singapore-based Contour in 2020 to digitize trade finance. The push into stablecoin development underscores SMBC’s commitment to leveraging blockchain technology for enhanced functionality and transaction speed, aligning with similar moves by other major banks such as JPMorgan and Citi. Ultimately, the project could set a precedent for further institutional adoption and innovation within the crypto space.