SMBC, Densan System and Ava Labs to Create New Stablecoin Payment and Management Services
Densan System has concluded a basic agreement on joint study with Sumitomo Mitsui Banking Corporation and Ava Labs with the aim of creating new services related to future stablecoin payment, distribution, and management.
Overview of the Agreement
SMBC, Densan System, and Ava Labs will study approaches to the sound distribution and utilization of stablecoins, while aiming to improve the efficiency of existing financial functions leveraging blockchain characteristics and create new payment, distribution, and management services. Specifically, they will explore various use cases from issuance to distribution, payment, and management in financial institution domains and BtoC/BtoB domains, advancing requirement definitions. Rather than stopping at one-off proof-of-concept experiments, they will jointly study the materialization of use cases with a view toward continuous business utilization and commercialization.
Background
Stablecoins have been legally positioned as "electronic payment instruments" under the amended Payment Services Act that came into effect on June 1, 2023, allowing their use as digital currencies linked to the value of legal tender such as the Japanese yen and US dollar. In addition to value stability, they have the potential to be superior to existing remittance methods in terms of both cost and speed, with expectations for utilization in international remittances, inter-company payments, and small-amount high-frequency payments both domestically and internationally.
Densan System has expanded its business as a pioneer in payment and collection agency services since becoming the first private company to launch account transfer services and convenience store payment services. Particularly in convenience store collection agency services, it has built payment infrastructure supporting payments at over 65,000 convenience stores and drug stores nationwide. Leveraging strong collection agency and payment touchpoints with general consumers, member stores, corporations, and local governments, the company aims to build next-generation payment infrastructure using stablecoins.
SMBC believes that advancing joint study of stablecoins, which could become new payment infrastructure utilizing blockchain through collaboration with Densan System's advanced initiatives and Ava Labs, a world-leading blockchain development company, will contribute to the advancement and efficiency of Japan's financial functions, leading to the conclusion of this Agreement.
Future Outlook
Through this joint study, SMBC, Densan System, and Ava Labs will promote the social implementation of new value brought by stablecoins and contribute to the further development of Japan's financial market. In the future, based on the knowledge and results obtained from this joint study, they aim for commercialization with a view toward expansion to broader use cases and international cooperation.
Norbert Gehrke
