TL;DR
- Sumitomo Mitsui Financial Group is collaborating with Ava Labs and FireBlocks to develop a stablecoin with blockchain infrastructure.
- The supply of stablecoins on Avalanche increased by 70% in one year, but the lack of DeFi usage prevented it from boosting AVAX demand.
- Nansen analysts predict the crypto market could bottom out before June if the outlook on trade negotiations becomes clearer.
Sumitomo Mitsui Financial Group is working on developing a stablecoin in collaboration with Ava Labs and FireBlocks. Ava Labs will handle the blockchain infrastructure, while FireBlocks will develop the digital asset management system.
The project also involves the systems company TIS, which will contribute to designing the technological foundation. A testing phase will take place in the second half of the 2025 fiscal year before assessing its implementation for business payments.
Why Isn’t Avalanche Recovering?
Meanwhile, Avalanche has experienced a 70% increase in stablecoin supply over the past year, reaching $2.5 billion by the end of March. However, this growth has not driven demand for AVAX, which has lost nearly 60% of its value over the same period.
Most of these funds come from bridged Tether on the network, but they are not actively used in decentralized finance applications. The lack of integration into lending, swaps, or as collateral has prevented the liquidity expansion from translating into a price increase for the token.
The Market Could Bottom Out Before June
The crypto market has generally shown weakness in recent weeks due to uncertainty caused by the trade measures implemented by the United States. Donald Trump’s administration will announce new import tariffs on April 2, which has pressured both the crypto industry and traditional financial markets. Nansen analysts estimate that the market could bottom out before June, once the outlook on trade negotiations becomes clearer.
Stablecoin development continues to gain traction within the financial sector, both in DeFi markets and in projects led by banking institutions. Sumitomo Mitsui’s initiative is part of a clear trend, as traditional entities seek to adopt blockchain-based solutions to enhance transaction efficiency and asset management.
