SMBC, TIS, Ava Labs & Fireblocks partner on stablecoin commercialization
Sumitomo Mitsui Financial Group, Sumitomo Mitsui Banking Corporation, TIS, Ava Labs, and Fireblocks have signed a basic agreement concerning joint exploration of stablecoin utilization with a view toward future commercialization.
Overview of the Agreement
SMBC Group, TIS, Ava Labs, and Fireblocks have formally agreed to begin joint exploration of stablecoin utilization with a view toward future commercialization.
In this Joint Exploration, the companies will examine the definition of specific requirements that must be met when issuing and circulating stablecoins capable of being used for settlements in the wholesale domain between financial institutions and businesses. They will also promote the exploration and examination of use cases that leverage the characteristics of stablecoins. This Joint Exploration aims to conceptualize use cases with a view toward ongoing business implementation, rather than limiting their application to proof-of-concept experiments.
Furthermore, as there is also a need for stablecoins as a settlement method for RWA (Real World Assets), which represent traditional financial assets such as government and corporate bonds, as well as real-world assets such as real estate in the form of tokens, the companies will collaborate to promote the widespread adoption of token businesses both domestically and internationally.
Background of the Agreement
Stablecoins are a type of digital currency designed to maintain a value pegged to legal tender such as Japanese Yen or US Dollars. Generally, stablecoins have very small price fluctuations compared to crypto assets and maintain stable value. They are also superior in terms of cost and speed compared to existing remittance methods. These characteristics make stablecoins promising for use cases such as international remittances, inter-company settlements, and small-amount high-frequency settlements. In Europe and the United States, stablecoins are increasingly being used as a settlement method for RWAs.
In Japan, the revised Payment Services Act, which came into effect on June 1, 2023, defined stablecoins as electronic payment methods, officially permitting their use. Currently, multiple financial institutions and businesses are conducting studies and proof-of-concept experiments toward the issuance and circulation of stablecoins.
SMBC Group believes that collaborating with TIS, Ava Labs, and Fireblocks—companies advancing pioneering initiatives around digital assets both domestically and internationally—to conduct joint exploration related to stablecoins, which could potentially become a new settlement infrastructure in the future, is a significant undertaking that will help promote the efficiency and sophistication of financial functions in Japan. This led to the conclusion of the Agreement.
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