Sumitomo Mitsui Financial Group, which manages Japan’s second-largest bank, SMBC, is set to launch a stablecoin in collaboration with Ava Labs and Fireblocks, Nikkei reports.

The financial institution plans to test the project in the second half of 2025, with the token’s release slated for 2026.

Ava Labs will provide blockchain infrastructure, while Fireblocks will develop a stablecoin management system.

SMBC has also partnered with local IT company TIS to handle technical support during testing.

This isn’t the bank’s first foray into blockchain and tokens. In 2022, SMBC launched the Token Business Lab in partnership with HashPort, focused on NFT services. They later tested the issuance of soulbound tokens for identity verification.

In September 2024, SMBC announced plans for a cross-border pilot project to create stablecoins in collaboration with two other major Japanese financial institutions — Mitsubishi UFJ Financial Group and Mizuho Financial Group.

In February 2025, it was reported that Japan’s Financial Services Agency would review cryptocurrency regulations, including the potential to classify digital assets as financial products “on par with securities.”