SMBC and Circle join forces to explore stablecoin use cases in financial markets

The initiative will focus on developing a framework for issuing and circulating these digital assets, as well as analyzing regulatory considerations and potential real-world applications.

Japan’s Sumitomo Mitsui Banking Corp. (SMBC) is joining forces with Circle, the issuer of the USD coin (USDC) stablecoin, to explore the potential of USDC in Japan’s financial markets.

The initiative will focus on developing a framework for issuing and circulating these digital assets, as well as analysing regulatory considerations and potential real-world applications.

Exploring stablecoin use cases in financial markets

A primary aspect of the collaboration involves examining how stablecoins could facilitate settlements for tokenized assets, including government bonds, corporate debt, and real estate.

While the companies have yet to provide a timeline for potential implementation, the effort aligns with noticeable industry interest in leveraging stablecoins for financial transactions.

Stablecoins, digital assets tied to fiat currencies such as the JPY or USD, have seen significant growth, with their market capitalisation rising nearly 50% over the past year to approximately USD 228 billion according to Coindeks.

Beyond their role in cryptocurrency markets, they are increasingly used for payments and remittances due to their efficiency compared to traditional banking institutions. Various financial entities, including global asset managers and government institutions, are making moves to establish a presence in this sector.

Japan has been advancing its regulatory framework for stablecoins, recognising them as electronic payment instruments under the revised Payment Services Act in 2023. SMBC has previously engaged in multiple digital asset initiatives. In 2022, it established a digital asset custody service, and a year earlier, it collaborated with asset tokenization firm Securitize to conduct tests on security token issuance.

In March 2025, Circle, a major stablecoin issuer, introduced its USDC token in Japan after obtaining the necessary regulatory approvals, partnering with a subsidiary of financial services provider SBI Holdings.

Circle and SBI Holdings first established their partnership in 2023, aiming to advance stablecoin distribution, banking integrations, and Web3 technology development within the Japanese market. This announcement represends a continuation of these efforts, with a focus on increasing USDC liquidity and strengthening Japan’s digital finance infrastructure.