Sumitomo Mitsui Trust is one of Japan’s largest banks. It will likely enter the cryptocurrency custody market. To launch a new company, the company will partner with Bitbank, a Tokyo-based cryptocurrency trading platform, and offer institutional-grade custody services for digital assets.
Sumitomo Mitsui Trust Bank will enter the digital custody business
Sumitomo Mitsui Trust Bank is a Japanese financial institution that has made a decision to enter the cryptocurrency custody market. , the company , announced it would launch a digital assets custody firm in partnership with Bitbank (a Tokyo-based cryptocurrency exchange). Japan Digital Asset Trust, owned 15% by Sumitomo Mitsui Trust, and 85% of Bitbank, will launch the company. It will provide custody services for institutional customers.
Local media reports that the goal of the move was to capture the local institutional markets that still view the issue custody as a deterrent to investment in these new products. Sumitomo Mitsui Trust believes investors will feel more comfortable with digital assets if custody is provided by financial institutions that are recognized and trusted, rather than crypto exchanges which don’t often face the same scrutiny as established regulatory bodies.
At its inception, the capital of the company was 300 million yen ($2.3million). The two companies expect other investors to jump into the proposal to reach 10 Billion yen ($78 Million).
Operation and Competition
As other competitors rush to offer these services in Japan, the new company hopes to launch its operations this year. To offer similar services to customers, Nomuraand Crypto Garage have also launched a joint venture.
The Japan Digital Asset Trust will offer a new product. According to reports, the company plans to issue a stablecoin that is yen-pegged. This will be supported by regulations that allow banks to launch such a product. The partnership has not provided any further information.
The company is entering crypto during a market downturn. Bitcoin and other cryptocurrency have lost a lot of their value. However, the rise in blockchain gaming and the metaverse could boost interest in cryptocurrency. Japan Digital Asset Trust expects stablecoin demand to rise as the metaverse worlds become more prominent.
