Sumitomo Mitsui Trust (one of Japan’s most important banks) will enter cryptocurrency custody. It has entered into partnership with Bitbank (a Tokyo-based cryptocurrency exchange) to create a company which will offer institutional-grade custody services for NFTs and digital assets.
Sumitomo Mitsui Trust Bank enters digital custody business
Sumitomo Mitsui Trust Bank is a Japanese financial institution that has entered the cryptocurrency custody industry. In partnership with Bitbank (a Tokyo-based cryptocurrency exchange), the company will create a digital assets custody firm. The company, which will be named Japan Digital Asset Trust — and owned 15% by Sumitomo Mitsui Trust and 85% by Bitbank — will focus on providing custody of crypto and NFTs to institutional customers.
Local media reported that this move was made to attract the local institution market. They still view the problem of custody as an obstacle to their investment in these products. Sumitomo Mitsui Trust believes that investors will be more comfortable holding digital assets if the custody is provided by recognized institutions in the financial world instead of crypto exchanges, which often don’t face the same scrutiny from the established regulatory bodies.
At its inception, the capital was 300 million yen (about $2.3 million). The two companies expect other investors to jump into the proposal for 10 billion yen ($78 millions).
Ops and competition
As other competitors rush to offer these services in Japan, the new company hopes to launch its operations this year. Nomura, Crypto Garage also plan to launch a joint venture that will offer customers services similar to those offered by Crypto Garage.
The Japan Digital Asset Trust, however, will offer a new product. The new company plans to issue a stablecoin that is yen-pegged, according to reports. This will be supported by the regulations that allow banks to offer this type of product. None of the partners have provided further information.
Although the company has entered the crypto market during the current downturn, bitcoin and other cryptocurrency have lost a lot of their value. The rise of blockchain gaming and metaverse may boost the demand for cryptocurrency. Japan Digital Asset Trust is said to expect demand for stablecoins, which usually don’t suffer the same volatility problems that other cryptocurrencies do, to increase as metaverse worlds rise to prominence.
Sumitomo Mitsui Trust will launch a new custody company. What are your thoughts? Leave your comments below.
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