Japan-based global investment bank Nomura has announced a venture to establish a custody offering for digital assets, CryptoNewspeople Japan reports today, May 16. The new project aims at removing barriers to institutional investment in the crypto space.
Nomura’s joint venture will be conducted in partnership with digital asset security company Ledger and investment house Global Advisors, according to reports.
The partners allege that a shortage of robust and legally regulated “safekeeping solutions” is currently preventing traditional asset managers from building investment vehicles in the crypto ecosystem, emphasizing that overcoming custody and security obstacles is crucial given that “one in five finance firms are [allegedly] considering launching digital asset trading and investment businesses in the coming year.”
The new digital asset custody venture is dubbed “Komainu,” and will provide infrastructure and an operational framework for institutional investors to integrate their traditional investment vehicles into the “frontier” crypto industry.
Just yesterday, major US crypto wallet provider and exchange service Coinbase announced its own custodian solution to address security and regulatory compliance concerns, with Coinbase VP Adam White saying that the product could “unlock $10 bln of institutional investor money sitting on the sideline.”
Earlier this month, New York Stock Exchange owner ICE revealed its own plans to offer crypto swap contracts that would be settled in BTC, suggesting it too has come up with an SEC-compliant custody solution for institutional holders.
The narrative that custody and regulatory obstacles are the last remaining obstacle for the crypto market to “mature” and draw major institutional investment is widely shared, and led CNBC’s Robert Kelly to suggest recently that cryptocurrencies now “look to be becoming an emergent asset class,” with custody solutions a significant milestone that could soon herald widespread crypto adoption in the traditional financial sector.