Sumitomo Mitsui Trust will launch a cryptocurrency
A leading Japanese bank, Sumitomo Mitsui Trust, is reportedly entering the cryptocurrency custody business. Japan's largest bank will partner with BitBank, the city's largest cryptocurrency exchange, to launch a new company focused on institutional-grade custody for digital assets and real-time transactions.
Japan Digital Asset Trust is a joint venture with Bitbank and Mitsui Trust, with Bitbank owning 85% and Mitsui Trust owning 15% of the company. A $2.3 million investment has reportedly been made, and $78 million is expected to be raised.
According to local media, the company is attempting to target the institutional segment of the market that is still reticent to invest in these new products due to custody concerns.
As the custody of digital assets is provided by a recognized financial institution rather than crypto exchanges, which may not be subject to as much scrutiny from regulatory agencies, Sumitomo Mitsui Trust believes investors will be more comfortable holding these assets.
Nomura Holdings Inc., a Japanese competitor bank, has also announced that they will be creating a division to offer custody services to institutions looking to buy bitcoin and other cryptocurrencies.
The Japan Digital Asset Trust will, however, also offer a different product; according to the reports, the trust plans to issue its own stablecoin backed by a yen peg, in compliance with the regulations which allow banks to launch such products. Other than that, any further information has not been released by the partners.
A new wave of gaming and the metaverse will support the growth of cryptocurrency during this period, as the company enters the crypto market at a time when bitcoin and other cryptocurrencies are losing value.
CBW - External Analyst