- Japanese bank Sumitomo Mitsui Trust will provide digital asset custody services for institutional investors.
- The venture is being carried out with Bitbank, which will own 85% of the venture.
- Institutional investors are interested in crypto, but want safeguards and good infrastructure.
Japanese bank Sumitomo Mitsui Trust has announced that it will offer digital asset custody service for institutional investors so that interested parties have a safe way of entering the market. Nikkei Asia reported the news, saying that the newly formed custodian will provide investment in both cryptocurrencies and non-fungible tokens only for large investors and firms.
The custodian, called the Japan Digital Asset Trust, is a joint venture between Sumitomo Mitsui Trust and the Bitbank cryptocurrency exchange. The latter will own 85% of the venture, while Sumitomo Mitsui Trust will own 15%. The idea is to build a strong and secure infrastructure for interested participants, who have shied away from investing for fear of hacks and scams.
Sumitomo Mitsui Trust has a total AUM of $664 billion and is a well-known financial firm. By entering the crypto space, it joins banks in many other countries that also offer institutions crypto services.
Furthermore, the bank will not be the only one in Japan to launch a cryptocurrency custody service. Financial holding company Nomura is also working with the Crypto Garage exchange to do the same. However, Sumitomo Mitsui Trust may also issue a yen-denominated stablecoin.
Institutions Still Keen on Crypto
Institutional investors have been pouring into the crypto market for a few years now, and the major assets have received a lot of investment. However, there is a small portion of these firms that are holding back because of concerns over volatility, among other things. The recent market crash will not convince them any better.
But on the whole, as proven by the Sumitomo Mitsui Trust announcement, more institutional investors still continue to arrive. This can give the market a lot of support going forward. If Japanese authorities work on crypto-friendly regulation, the results would be even better for Japanese investors.
Fidelity Investments is a good example of a successful asset management firm involving more crypto. The firm plans to offer bitcoin in 401k plans, which was cheered by some and raised some eyebrows among some lawmakers. The SEC has also said that firms with custody services must also add crypto as liabilities.