The Asian market has switched very quickly to the cryptocurrency industry, even exceeding the expectations set by the West. China and Japan have taken significant steps to boost their native fintech ecosystems.
The latest reports from Japan claimed that SBI Holdings, one of the country’s largest banking conglomerates, was getting ready to partner with Sumitomo Mitsui Financial Group [SMFG], the nation’s second-largest bank. The two entities will pool their resources to be the leading financial technology leader.
SBI’s push into the digital asset industry first came to light when it revealed its tie-up with Ripple based in San Francisco. The Ripple Partnership has elevated SBI’s status from being a national bank to a global baking network. SBI and SMFG stated that the new team would seek to create financial products and services that serve millennials much better than existing models.
SMFG is expected to acquire a significant stake in the SBI mobile brokerage unit called NeoModbile Securities. The 20% stake, worth billions of yen, would be the starting point for creating a new and improved banking ecosystem for the younger generation.
Aside from the acquisition, SMFG also plans to deposit a large chunk of capital into a 100 billion yen fund set up by SBI. Once the fund repository reaches an acceptable level, SBI will use the money to invest in blossoming fintech companies. The announcement even caught the eye of Nikkei Asian Review, that said in its latest publication:
“The two groups plan to offer a range of products, including mutual funds and insurance policies.SBI’s planned 100 billion yen investment fund that is to be set up with SMFG will focus on investments in companies that work with digital technology, including fintech, blockchain and 5G wireless networks. SMFG and SBI plan to accelerate their digital business strategies through collaborative efforts with investee companies.”
SMFG is not the first financial institution that SBI has partnered with, as it comes on the back of other tie-ups with lenders such as Shimane Bank, Fukushima Bank and Chikuho Bank. Japan’s focus on growing its native ecosystems was put on show with the partnership as the two companies pledged to support other regional banks and financial institutions.
Although Ripple was not mentioned during the partnership, it was easy to see how the news would be positive for the Brad Garlinghouse led organization. SBI CEO Yoshitaka Kitao is a member of the Ripple board of directors and is known to be a big supporter of its native cryptocurrency XRP as well. SBI’s foray into crypto was solidified last year when SBI Mining Chip, an SBI subsidiary started manufacturing cryptocurrency mining equipment for large scale use.