Bankin’ Into Crypto: SBI Group Launches Crypto Exchange
Today, June 4th, Japanese financial services powerhouse SBI Group announced the launch of its much-awaited cryptocurrency exchange, dubbed VCTRADE, apparently the first “bank-backed crypto exchange.” Is this the beginning of the first wave of traditional banks diving headlong into crypto?
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What will be interesting is how SBI’s new crypto arm plans to carve out its position in the already saturated Japanese crypto turf. Indeed, Japan has more than a handful of entrenched exchanges. Will SBI capitalize on its existing institutional customer base, hoping these clients convert from regular banking into crypto trading?
It’s SBI’s now deployed ace-in-the-hole, by the looks of it.
SBI’s VCTRADE: Can It Make Inroads?
In its formal announcement, SBI publicized the launch of its native crypto exchange, hailing yet another adoption milestone in the cryptoverse. Notably, VCTRADE will begin with support for the Ripple protocol’s cryptocurrency, XRP, with both bitcoin (BTC) and bitcoin cash (BCH) coming after. To start, only users who signed up last autumn can leverage the new trading service. However, the company projects opening the exchange for all users later in the summer — tentatively by the end of July 2018.
The news makes good on part of last year’s promises, as it was then that SBI Group first unveiled plans to commence multiple crypto-focused initiatives to create a “new financial ecosystem based on cryptocurrency,” one of them being to set up a “dominant cryptocurrency exchange platform.”
However, not all went according to the laid-out plans, as the launch had been postponed on multiple occasions. SBI Group justified the precautionary delays as “waiting for the appropriate time to start.”
According to SBI Group CEO Yoshitaka Kitao, one of the reasons to push back the timeline of the launch of the crypto exchange was the now infamous Coincheck hack that rocked the Japanese cryptosphere and tightened up the nation’s cryptoeconomy environment. Another delaying factor was SBI Group’s cancelled business alliance agreement with China’s crypto exchange Huobi.
At the time, CEO Yoshitaka Kitao said:
“When we do it, it will be number one in the blink of an eye so quickly, so even if a tremendous number of customers come, we can build a system that can bear [it].”
Capitalizing on Mainstream, Institutional Experience
Even though SBI Group’s subsidiary SBI Virtual Currencies was one of the first to receive the domestic Financial Services Agency’s (FSA) approval to operate a cryptocurrency exchange, the Japanese financial titan is obviously far from having first-mover advantage. As such, the bank will presumably lean on its experience in serving mainstream, institutional customers in its bid to set itself apart from the competition.
SBI Virtual Currencies’ X-factor, then, is the company’s institutional client base and the trusted brand name its parent company has developed. With the move, SBI Group could see its institutional traders diving into cryptocurrencies.
Will these traders chase the prospect of high profits in the cryptocurrency space? Many presumably will.
Will VCTRADE be able to compete with existing crypto players in the market? Share your views in the comments section.
Images via Nikkei Asian Review, Wandermelon