One of Japan’s largest banks is leveraging Fireblocks, alongside other technology providers, to explore stablecoin initiatives, dialing up momentum in the Japanese digital asset space.
Fireblocks, Sumitomo Mitsui Banking Corporation (SMBC), Ava Labs, and TIS have signed a Memorandum of Understanding (MoU) to initiate joint discussions on the commercial use of stablecoins.
Since last year, the four parties have engaged in preliminary discussions to assess the feasibility of leveraging stablecoins for wholesale payments between financial institutions and businesses. Additionally, the initiative will examine potential use cases leveraging stablecoins, including as a settlement mechanism for tokenized financial and real-world assets (RWAs), such as government and corporate bonds, as well as real estate.
This MoU will see Fireblocks, SMBC, Ava Labs, and TIS collaborate to develop a framework for stablecoin issuance and circulation, including exploring key technical, regulatory, and market infrastructure requirements both in Japan and further afield.
Upping the ante with stablecoins
Stablecoins have emerged as a game-changer in financial services, providing a near-instant, lower-cost alternative to traditional payment methods, with use cases including international remittances, corporate cross-border settlements, and payouts.
Tokenized deposits and stablecoins have the potential to reduce cross-border transaction costs by up to 80% while accelerating settlement speeds from days to mere seconds. This efficiency has driven rapid stablecoin adoption, with the total market capitalization at $235 billion as of March 2025.
Banks and financial institutions are increasingly recognizing the immense potential of stablecoins to positively impact the financial system. We are excited to work with SMBC to drive faster, more cost-effective payments via stablecoins and advance their crucial role in tokenizing financial markets.
The tokenization of financial markets gathers speed globally
The tokenization of traditional financial assets and real-world assets (RWA) has grown rapidly, particularly in the U.S. and Europe, with stablecoins emerging as an important settlement tool for these digital assets and regulatory frameworks being developed in lockstep.
Japan, with its well-regulated financial markets and global trade activity exceeding $1.5 trillion annually, presents a unique opportunity for stablecoin-driven efficiency, particularly in the areas of cross-border trade and interbank settlements.
Regulatory tailwinds supporting innovation
Japan’s regulatory environment has also evolved to support stablecoin adoption. With the amended Payment Services Act taking effect in June 2023, stablecoins have been officially recognized as electronic payment instruments, opening the door for financial institutions and businesses to explore their use for remittances and settlements.
Since March 2025, reserving requirements on Trust Banks are being adjusted towards a more permissive stance. This regulatory momentum, combined with Japan’s commitment to financial innovation, positions the country as a potential leader in integrating stablecoins into traditional financial infrastructure.
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