Sumitomo Mitsui Trust will partner with Bitbank to form a company focused on institutional custodial services for bitcoin and other cryptocurrencies.
Sumitomo Mitsui Trust, Japan's second largest bank, is creating a new company called Japan Digital Asset Trust to offer custodial services for bitcoin and other cryptocurrencies for institutional clients, according to a report by Nikkei Asia.
The new company will hold assets like bitcoin and other cryptocurrencies for large investors and corporations because the company reportedly believes investors will feel more comfortable if the custody of those assets can be held by trusted financial institutions.
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.
When zoomed out to the global scale, the adoption of bitcoin as an institutional asset class is rising as Mitsui Trust joins other financial institutions such as BNY Mellon who just last year backed a cryptocurrency exchange. Similarly, Fidelity authored Bitcoin First, which was a resource to show institutional investors why they should invest in bitcoin before any other cryptocurrency, and has subsequently offered bitcoin-based products.
Global banking leader Morgan Stanley also released a report discussing bitcoin’s viability as a currency following the events of Jack Maller’s announcement at Bitcoin 2022 where he announced that Strike, his Bitcoin infrastructure company, had integrated with the largest point–of-sale provider in the world.