Japan’s Second Largest Bank Now Offers Crypto Custodial Services

May 23, 2022 4:05 pm Comments

Sumitomo Mitsui Trust, Japan’s second largest bank, has just announced that the bank will now be offering crypto custodial services.

To do this, the bank has created a new company that is called Japan Digital Asset Trust which will specifically provide custodial services for digital assets like Bitcoin and other popular crypto for institutional clients.

This provides a large boost in terms of institutional adoption of crypto due to the fact that these large institutions would only feel confident if their crypto was being held by a trusted financial bank.

Since this is now available, other large investors may become more open to the industry and seek more exposure to the markets.

BitcoinMagazine reports:

Japan Digital Asset Trust will be a joint-venture with a majority ownership belonging to Bitbank, a Tokyo-based cryptocurrency exchange, who will control 85% of the venture. The remaining 15% ownership will be owned by Mitsui.

The new venture is reportedly expected to have $2.3 million in capital for launch and is expecting to raise enough capital from investors to reach a goal of $78 million.

This announcement follows the news that Japanese competitor bank Nomura Holdings Inc. also recently announced they would be creating a subsidiary to offer custodial services to institutional clients looking to acquire bitcoin and other cryptocurrencies.

The same occurrence is also happening with other financial institutions all around the world as many are now looking at the adoption of Bitcoin as an institutional asset.

Other major financial institutions such as BNY Mellon and Fidelity had also launched their own services that either sell crypto-related products or provide services that deal directly with digital assets.

Reports show that prominent investment bank Morgan Stanley is also in discussions regarding Bitcoin’s ability to become a true currency.

Much of this is happening even as the current crypto market is undergoing a bearish slump where large investors are looking to take advantage of at the moment.

CoinDesk.com reports:

The decision to create the the unit comes after an announcement earlier this month from Japanese rival Nomura (NMR) that it is launching a subsidiary that will give institutional clients access to cryptocurrencies.

It also represents a global shift towards the asset class, including banks such as BNP Paribas beginning to use JP Morgan’s (JPM) blockchain-based network Onyx for fixed income trading.

The custody service will be a joint-venture between Bitbank, the largest cryptocurrency exchange in Japan, which will own 85%, and Sumitomo Mitsui Trust, which will own 15%.

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