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 küresel 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 küresel asset manager Fidelity Investments to U.S. state Wyoming, are making steps to enter the market.

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.