Sumitomo Mitsui Trust, one of the leading banking institutions in Japan, is set to join the cryptocurrency custodianship. The company has partnered with Bitbank, a Tokyo-based cryptocurrency exchange, to launch a new company that will focus on providing institutional-grade custody for digital assets and NFTs.
Sumitomo Mitsui Trust Bank to Enter Digital Custody Business
Sumitomo Mitsui Trust Bank, a major financial institution in Japan, has decided to join the custodianship of cryptocurrency. The company has announced that it will launch a digital asset safekeeping company in partnership with Bitbank, a Tokyo-based cryptocurrency exchange. The company, to be renamed Japan Digital Asset Trust – and owned 15% by Sumitomo Mitsui Trust and 85% by Bitbank – will focus on providing crypto and NFT custody to institutional clients.
According to local media, the aim of this decision is to conquer the local institutional market, which still sees the issue of preservation as an obstacle to investing in these new products. Sumitomo Mitsui Trust believes investors will feel more comfortable holding digital assets if custody is provided by reputable institutions in the financial world rather than crypto exchanges, which often do not receive the same scrutiny from established regulatory bodies .
The company’s capital would be 300 million yen ($2.3 million) on its debut, with the two companies expecting other investors to dive into the proposal to reach $10 billion ($78 million) dollars.
Operations and Competition
The new company aims to launch this year as other competitors are also rushing to bring these services to the Japanese market. Nomura and Crypto Garage are also launching a joint venture to offer similar services to their clients.
However, the Japan Digital Asset Trust will also offer another product. According to reports, the new company plans to issue a yen-pegged stablecoin, backed by regulations that will allow banks to launch such a product. No further details are known about the partners in the partnership.
As the company enters the crypto sector during a market downturn, with bitcoin and other cryptocurrencies losing much of their value, the rise of the metaverse and blockchain gaming could fuel interest in cryptocurrency during this time. Japan Digital Asset Trust would expect the demand for stablecoins, which generally do not have the same volatility issues as other cryptocurrencies, to increase as the metaverse worlds become more important.
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