The bank’s pivot to digital assets comes alongside a global banking shift toward cryptocurrencies.
Japanese bank Sumitomo Mitsui Trust will form a new company to offer digital asset custody services to institutional investors, according to a report by Nikkei Asia.
Named the Japan Digital Asset Trust, the company will target institutional investors perturbed by the risk of cryptocurrency theft.
The decision to create the the unit comes after an announcement earlier this month from Japanese rival Nomura (NMR) that it is launching a subsidiary that will give institutional clients access to cryptocurrencies. It also represents a global shift towards the asset class, including banks such as BNP Paribas beginning to use JP Morgan’s (JPM) blockchain-based network Onyx for fixed income trading.
The custody service will be a joint-venture between Bitbank, the largest cryptocurrency exchange in Japan, which will own 85%, and Sumitomo Mitsui Trust, which will own 15%.
Japan Digital Asset Trust will have $2.3 million in initial capital with hopes to expand to $78 million through additional investment.