SBI Holdings Seeks to Launch Japan’s First Crypto Fund

Japanese financial conglomerate SBI Holdings Inc. expects to launch the country’s first crypto fund in late November.

fund could include cryptocurrencies such as Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin and reach several hundred million dollars. fund is aimed at investors who understand the risks associated with cryptocurrencies. Due to these risks, investors will likely have to pay a minimum of 1-3 million yen ($ 9,000- $ 27,000).

Cryptocurrency diversification

SBI affiliate president Tomoya Asakura particularly emphasized the diversification benefits of cryptocurrencies, rather than their speculative qualities. Asakura has even acknowledged this “overwhelming perception that cryptocurrencies are highly volatile and speculative” regarding his mandate.

He believes his job is to build a ‘registry’ that shows the public and regulators that investors get a more resilient portfolio by including cryptocurrencies. This is because they often move in reverse toward stocks and other traditional investments, he said. Furthermore, Asakura said that cryptocurrency funds could act as a “satellite” asset in a portfolio, rather than what are considered “core” investments.

“I want people to hold it together with other assets and experience first-hand how useful diversifying portfolios can be,” She said Asakura. “Once people hear it first hand,” he said, “they will understand that we are not recommending cryptocurrencies as a tool for speculation.”

Crypto regulation in Japan

It took SBI four years to get the fund off the ground, something scandals and tougher regulations have prevented multiple times. In 2019, Japan’s Financial Services Agency (FSA) tightened regulations on cryptocurrency exchange operators after a massive theft the previous year.

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Additionally, the FSA has prohibited companies from selling cryptocurrencies through mutual funds. This was a popular form of investing in Japan that SBI had initially tried to use for its fund. Now, the brokerage has opted for a vehicle known as a “joint stock company.”

However, despite potentially stricter regulations for cryptocurrencies, digital assets are becoming increasingly popular in Japan. According to data from the exchange association, cryptocurrency transactions for the first half of 2021 more than doubled to 77 trillion yen from the previous year.

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