Media: Sumitomo Mitsui Trust to launch custodial service for cryptocurrencies

The Japanese bank Sumitomo Mitsui Trust, with assets worth $664 billion, will create a subsidiary that will offer custody services for cryptocurrencies to institutional investors, according to Nikkei Asia.

Japan Digital Asset Trust will be a joint venture, with 85% of the stake held by the cryptocurrency exchange Bitbank and 15% by the bank.

Sumitomo Mitsui Trust believes that large investors and corporations will feel more secure investing in and owning digital assets if they can entrust them to a traditional financial institution with an established reputation.

Another line of business for the joint venture will be the issuance of a yen-pegged stablecoin. The bank foresees rising demand for such assets as metaverses and other interactive technologies develop.

Initial capital for Japan Digital Asset Trust will be 300 million yen ($2.3 million). Through external investment it is planned to grow to 10 billion yen ($78 million). The new venture will be registered by the end of 2022.

Bitbank, based in Tokyo, ranks among the top domestic players in digital asset volumes on its platform, behind only BitFlyer and Coincheck. Its head Noriyuki Hirosue is the chairman of the Japanese cryptocurrency business association, which brings together 112 industry participants.

In May, Nomura, Japan’s largest broker, announced the creation of an institutional-grade crypto division.