Japanese banks plan to offer new ways to protect cryptocurrency investors by managing the digital assets of the exchanges .
Financial institutions shall ensure the safety of customers’ capital, even in the event of bankruptcy of the exchanges.
Traditionally, Japanese banks are involved in lending and savings, as well as conducting reliable operations, usually with property or pension funds. Now they can expand the range of services offered, to the cryptocurrency market. Under the plan, users of the exchanges will continue to trade in them, but banks will administer the crypto-coins. The exchanges themselves will only become intermediary between users and financial institutions.
The first to implement this initiative in April will be Mitsubishi UFJ Trust and Banking. In addition, the Sumitomo Mitsui Trust Bank also plans to provide similar services.
The new payment services law, which came into effect in April last year, requires exchanges to manage users’ capital separately from their own. But, according to the news, many Japanese exchanges are small companies with limited investment opportunities, and often they consider the capital of users as their own. And the last incident with the Coincheck, the second largest exchange of Japan , showed that large platforms are also at risk from the point of view of protection.
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