Sumitomo Mitsui Trust, Asia’s largest asset manager, will tap Tokyo-based cryptocurrency exchange Bitbank to establish a company that offers digital asset services for institutional clients. The new firm will be able to hold cryptocurrencies as well as Non-Fungible Tokens, (NFTs), for large investors and corporations.
Sumitomo Mitsui Trust focuses on security issues
Sumitomo Mitsui Trust’s newest crypto partner Bitbank, which manages 200 billion yen of customer assets, was reportedly ranked third in Japan.
Sumitomo Mitsui Trust, the crypto giant, will retain the remainder. According to Nikkei Asia, JDAT has a $300 million initial capital ($2.3 million). It plans to increase its capital base to 10 Billion Yen ($78 Million) through future fundraising.
A shared concern about the security of holding cryptocurrencies led to the formation of a new partnership. The new partnership will concentrate on creating “a robust security system” for the new company. Large investors “remain cautious about owning digital assets,” despite the fact that centralized crypto exchanges have the ability to exempt retail investors from having to worry about private keys.
Sumitomo Mitsui Trust believes that theft in crypto space is a common obstacle to institutional investors. They tend to entrust “well established financial institutions” rather than personally owning such an asset. It was determined that institutions will no longer be concerned about investing in digital assets with its new crypto venture.
JDAT is working on a stablecoin in yen to address the growing interest and demand for the Metaverse. The firm believes that cyberspace will be closely linked with virtual reality, which will increase the demand for such assets.
Japanese banks are facing increasing competition
Sumitomo Mitsui Trust, a bank giant that focuses on cryptocurrencies, isn’t the only one. Nomura, its main competitor, also announced last week that it would establish a crypto unit for institutions. The bank believed that the crypto sector would mature and become more regulated over time, making it attractive to institutional clients.
The largest Japanese investment bank launched Komainu, a custodial system for traditional investors, in partnership with Ledger. CoinShares was also involved in the launch of Komainu. The entity claimed that Komainu was the first digital asset custody solution to be regulated by institutions.
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