Sumitomo Mitsui Financial Group (SMBC), one of Japan’s largest banking groups, is the latest financial giant to delve into stablecoins as the market for the $230 billion asset class is soaring with regulations being laid down globally.

The banking group signed an agreement with Avalanche blockchain development firm Ava Labs, digital asset security company Fireblocks and IT service provider TIS to explore the commercialization of stablecoins in the country, according to a Wednesday press release.

The collaboration will focus on developing a framework for issuing and circulating stablecoins, analyzing regulatory requirements and identifying practical applications, the release said. One key area of interest is using stablecoins for settling tokenized financial and real-world assets (RWA) such as government bonds, corporate debt and real estate. The timeline for potential commercial rollout has not been specified.

Stablecoins, or cryptocurrencies pegged to fiat currencies like the Japanese yen or U.S. dollar, are a booming crypto sector, growing nearly 50% to $228 billion over the past year. They have become an integral part of global digital asset markets, and are also increasingly popular for remittances and payments as a faster and cheaper alternative to traditional banking rails. A wide variety of entities, ranging from global asset manager Fidelity Investments to U.S. state Wyoming, are making steps to enter the market.

Read more: CoinDesk Weekly Recap: Stablecoins, Stablecoins, Stablecoins

Japan has been spearheading efforts to regulate stablecoins, recognizing them as electronic payment instruments in 2023 with the revised Payment Services Act. Most recently, stablecoin issuer Circle launched its $58 billion USDC token in the country with financial giant SBI Holdings’ subsidiary last month after obtaining regulatory approval.

SMBC has previously engaged in digital asset initiatives, including establishing a digital asset custodian in 2022 and testing security token issuance with asset tokenization firm Securitize in 2021.

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 2547.72, down 1.0% (-26.77) since 4 p.m. ET on Wednesday.

Two of the 20 assets are trading higher.

Leaders: SUI (+1.0%) and ADA (+0.2%).

Laggards: AAVE (-5.3%) and LINK (-4.7%).

The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

The Trump administration’s formation of a U.S. Strategic Bitcoin Reserve might have China re-thinking its hardline stance against crypto and that could be key for accelerated global adoption of BTC, asset manager Grayscale said in a research report Monday.

«The most important country to watch in this regard is China,» said Grayscale, adding that if the country eases its crypto restrictions «it could significantly boost global adoption.»

President Trump last month directed his administration to form a Strategic Bitcoin Reserve to — at a minimum — hold the assets that have been seized by the government.

Grayscale noted that current Chinese government policy bans most crypto activities, such as trading and mining, but permits the holding of digital assets.

Still, «policymakers have allowed an expansion of crypto-related activity in Hong Kong under the ‘one country, two systems’ framework,» Grayscale said.

Local regulators may be taking another look at the legal treatment of cryptocurrencies in the country. China’s Supreme Court and other judicial bodies had a discussion in February about how to treat digital assets in future legal cases, the report noted.

Read more: U.S. Strategic Bitcoin Reserve, Crypto Stockpile a ‘Pivotal Moment’ for Industry: KBW