Sumitomo Mitsui Trust, Japan’s second-largest bank, is going to be providing crypto custodial services. The bank is creating a new branch called Japan Digital Asset Trust. The purpose of this branch will be to offer custodial services for Bitcoin and other cryptocurrencies for institutional clients, according to a report by Nikkei Asia.
A crypto custody service stores and secures digital assets securely. These services are offered by crypto exchanges, banks, and brokerages. Smart money investors are large financial companies like hedge funds, banks, and mutual funds. These have large capital funds which they can use to invest in crypto and Bitcoin.
Japan Digital Asset Trust will have an initial capital of 300 million yen (appx. $2.3 million) from the main bank. Other investors will contribute this capital later in order to expand its capital base to its target of 10 billion yen (appx. $78 million).
The Japanese bank expects the demand for stable coins to increase as the metaverse takes off. The branch will hold digital assets like cryptos and non-fungible tokens (NFTs) for large investors.
Future of Crypto Adoption
The adoption of bitcoin as a financial asset class is on the rise. Sumitomo Mitsui Trust bank just joins many other financial companies around the world in promoting the use of crypto to daily ordinary people.
For instance, in 2021, the Bank of New York, Mellon (BNY Mellon) joined four other banks in backing Pure Digital, a crypto exchange. Similarly, Microstrategy, Tesla, and other major global companies have been rooting for crypto and bitcoin. At this point, it is safe to say crypto and Bitcoin have gone mainstream. Other niches, like NFTs and Metaverse, are still growing.
Conclusion
Japan’s outlook on cryptocurrency looks promising. Banks, through crypto custody, increase the awareness of stable coins, NFTs, Metaverse, Bitcoin, and other Cryptocurrencies. It is said that smart money always gets the choicest meat. This is what Japan is doing. Allowing hedge funds and venture capitals to get into crypto first before opening the gates to the masses. The silver lining here is that, soon, banks will create these same services for the average joe. And then we shall have achieved true adoption. As a leader in crypto adoption, investors should pay keen attention to how Japan handles crypto in the coming years.