Sumitomo Mitsui Banking Corporation (SMBC), one of Japan's largest banks, and payment processing firm Densan System Co. are partnering with Avalanche to develop stablecoin-based payment services.

This collaboration is a direct application of Japan’s revised Payment Services Act, which enables licensed banks and trust companies to issue stablecoins. The project will leverage Densan's extensive network, which processes payments for over 65,000 convenience stores and retailers across Japan, providing a massive potential scale for adoption.

The partnership will explore the full lifecycle of stablecoins, including issuance, distribution, and settlement. Key use cases include business-to-business (B2B) payments, consumer retail transactions, and remittances.

What this signals for the industry: The move represents a significant step by major Japanese financial institutions to build practical, large-scale financial services on blockchain infrastructure. It validates Avalanche as a chosen platform for enterprise-grade applications and shows how new, clear regulations can immediately spur innovation from established financial players.