Sumitomo Mitsui Trust Holdings (SuMi) has announced it will create a trust company with Japanese crypto exchange Bitbank to manage digital assets for clients.

The newly developed firm will offer custodian digital currency and non-fungible token (NFT) services. The company is called Japan Digital Asset Trust Preparatory Company (JADAT) and is expected to shorten its name to Japan Digital Asset Trust.

The Tokyo-based parent companies have extensive experience in both centralized and decentralized finance (DeFi). SuMi has been providing financial services for both retail and wholesale customers since 2002 while Bitbank is one of the largest crypto exchanges in Asia, with a monthly trading volume of over $5 billion. 

Furthermore, Bitbank CEO Noriyuki Hirosue believes that the main growth drivers for cryptocurrencies are institutional investors while Japan’s main focus has been retail. He added that custodian services could gain great attention toward bitcoin (BTC) and other digital currencies.

“The biggest problem is that there is not a trustworthy digital custody service,” Hirosue told Bloomberg. “Given the past incidents, crypto companies do not enjoy public trust. 

“We need [the] cooperation of a major trust bank,” he added, referring to the large-scale theft of crypto-assets at exchanges in Japan and overseas in recent years. 

The newly-launched company, according to Hirosue, is awaiting regulatory approval. Its plans and characteristics have already been released on JADAT’s website. The firm is now looking for a custodial trust company license.

The trust company will use SuMi Trust Holding’s “know-how of trust business” and Bitbank’s “digital asset storage management technology.” 

JADAT will mainly store digital assets on hardware wallets, also known as cold wallets while taking high-security measures such as Hardware Security Module (HSM) and multi-sig.

“JADAT aims to have necessary factors of digital asset management for institutional investors and enterprises, such as access to digital asset exchanges, buying and selling executions, the audit by external auditors on a regular basis, and insurance coverage,” according to JADAT.

SuMi Trust is not the first major Japanese financial firm to join the crypto ecosystem. Last Oct, the country’s biggest brokerage, Nomura Holdings, and its joint venture company, known as Komainu, partnered with Crypto Garage to offer crypto-related custodial services for investors.

The post Japanese Bank Launches Digital Asset Joint Venture With Crypto Exchange appeared first on BeInCrypto.

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