Sumitomo Mitsui Trust is launching a cryptocurrency firm aimed at institutional investors


To satisfy the growing interest in the Metaverse, the newly-founded firm Japan Digital Asset Trust will work on a yen-denominated stablecoin.

Sumitomo Mitsui Trust, one of Asia’s top asset managers, will partner with Tokyo-based crypto exchange Bitbank to launch a firm that will provide institutional clients with digital asset services this year. For “big investors and organizations,” the newly formed firm will hold cryptocurrencies and Non-Fungible Tokens (NFTs).

Sumitomo Mitsui Trust is committed to security

Bitbank, Sumitomo Mitsui Trust’s newest crypto partner, is said to be Japan’s third-largest crypto exchange, with 200 billion yen in customer assets.

The crypto behemoth will own 85 percent of the newly formed Japan Digital Asset Trust (JDAT), with the remainder held by Sumitomo Mitsui Trust. According to Nikkei Asia, JDAT wants to raise 10 billion yen ($78 million) through future fundraising after starting with 300 million yen ($2.3 million).

The new cooperation will focus on developing “a solid security system for the new company,” based on a shared concern about the security issue with owning cryptocurrency. While centralized crypto exchanges relieve individual investors of the stress of keeping private keys, large investors “remain cautious about owning digital assets,” according to the report.

According to Sumitomo Mitsui Trust, theft in the crypto realm is a typical hurdle for institutional investors, who prefer to entrust “well-established financial organizations” rather than individually holding such an asset. Therefore, the bank believes that its new crypto venture will alleviate institutions’ fears of investing in digital assets.

JDAT will work on a yen-denominated stablecoin in response to the growing interest in the Metaverse, as the company believes that cyberspace, which is intimately linked to virtual reality, will increase demand for such assets.

Japanese banks are becoming increasingly competitive

Sumitomo Mitsui Trust isn’t the only financial behemoth doubling heavily on cryptocurrency-related services. Last week, its primary opponent revealed that Nomura would establish a crypto business aimed at institutions. The bank predicted that the crypto market would mature and become more regulated, making it more appealing to institutional clients.

In July 2020, Komainu, Japan’s largest investment bank, partnered with Ledger and investment firm CoinShares to create a custodial solution for traditional investors. According to the company, Komainu is the first regulated digital asset custody solution created by institutions for institutions.


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