Global banking giant Nomura launched its much-awaited Bitcoin custody service for institutional investors this week.
More than two years of development and clearing regulatory hurdles, Japan’s biggest bank partnered with Bitcoin hardware wallet manufacturer Ledger and crypto investment fund CoinShares to launch the new custody service.
Komainu The Bitcoin Guardian
Named “Komainu,” after the statue pairs of lion-like creatures that protect shrines throughout Japan, the eponymous custody service aims to offer its clients the same protection with their Bitcoin.
Based in Jersey, U.K., the new venture serves as a custodian and will offer regulatory compliance and insurance services to institutional investors for their cryptocurrency holdings.
The custody service has been fully audited and has passed legal paperwork of the U.S. Jersey Financial Services Commission, and will offer support for Bitcoin, Ethereum and some other large-cap altcoins.
What is Nomura?
Nomura is Japan’s largest and one of the world’s most prominent financial institutions. Based in Tokyo and established in 1925, Nomura has become a global financial services giant with global network in over 30 countries and $409.2 AUM.
The financial giant covers Retail, Asset Management, Wholesale and Merchant Banking. They employ over 28,000 staff worldwide, and are established in every global financial hub.
Jean-Marie Mognetti, the CEO of CoinShares, is head of Komainu, and he will be joined by Santander’s Andrew Morfill, who will take the role of Komainu’s Head of Operations.
Speaking in a press release Mognetti said the service will cater towards institutional investors such as banks, pension funds and mutual funds wanting to enter the cryptocurrency space.
‘Komainu has created the first turnkey solution that establishes the trust required by institutions to gain exposure to digital assets,’ said Mognetti.
‘What this partnership has highlighted is the need for credible and solid service providers to support industry participants. Komainu bridges the gap by bringing financial expertise and capabilities for institutional clients to feel confident their assets are in safe hands.’
As Secure As Cold Storage Thanks to Ledger Technology
The new custodial service will be using Ledger technology to secure its crypto assets, and the security and flexibility of Ledger technology offers Komainu’s customers the security of a cold storage solutions, while having the flexibility of a hot wallet.
The design security from Ledger is a bespoke solution and combines both hardware and software applications, and is underpinned by Ledger’s own application specific OS that stores and encrypts data.
Speaking of the partnership Pascal Gauthier of Ledger said he believed the lack of security in digital assets created a scenario where the institutions’ digital assets were weaponized against them, and that institutions were actively looking for ‘compliance and security when it comes to the custody of digital assets.’
It’s Not Nomura’s First Foray Into Crypto
This isn’t Nomura’s first foray into the crypto space. As well as sitting on the council Hedera Hashgraph, the Japanese bank launched a crypto-asset index for Japanese institutional investors in January 2020.
The index, NRI/IU, is made up of Bitcoin and Ether, and a few other large-cap cryptocurrencies. And using CryptoCompare API the product helps local traders and investors to evaluate their portfolio’s performance against the broader equity or bond market.
Wrapping It All Up
The news of Nomura’s shift deeper into Crypto comes as no surprise to anyone in the crypto space.
2018 was “the year of the institutions,” so they said. Well the truth is the infrastructure wasn’t ready, but now we’re seeing with the launch of Komainu that institutions are gearing up to open the doors of crypto to its clients.
Bakkt might have been a relative flop, for now, and Komainu might even drag its feet for a while, but it’s without question that institutions are interested, and the big money will find its way into the space.
This year? Next year? Who knows, but it’s coming.
Author: Pablo Clarke