Japan’s bank SBI, has announced that its new in-house cryptocurrency exchange has finally gone live. This is after several months’ delay as a result of the cryptocurrency’s security concerns.
This becomes the first cryptocurrency exchange to be backed by the bank in Japan. VCTRADE, as it is known is currently only available to users who pre-registered in October last year. Nevertheless, the rest of the public will also be in a position to use it commencing July this year.
Working With Ripple
SBI stated that at the moment VCTRADE will only support trading of XRP. On working with Ripple SBI’s CEO Yoshitaka Kitao stated that Ripple was the only company that had delivered battle-tested enterprise solutions and a global bank customer traction which included with top banks already signed in the Asia Pacific. He went on to state that the bank was excited to drive the adoption of distributed financial technology throughout Asia.
Even though timelines were not specified, the bank stated that Bitcoin Cash and Bitcoin will follow later. VCTRADE will have no transaction fees for XRP and Japanese yen trading at launch but will charge customers withdrawal fees in yen.
SBI has had ties with San-Francisco-based Ripple as one of their global network users hence, the bank’s launch of VICTRADE does not really come as a surprise. Ripple uses a distributed ledger to make payments across borders.
SBI Virtual Currencies was introduced as a subsidiary of SBI holdings in October 2016. It was the first crypto exchange to be fully backed by a major financial institution in Japan.
Last year the country introduced the Japanese Payment Services act responsible for the legalizing of cryptocurrency payments. It is this act that permitted Japan’s Financial Services Agency (FSA), any cryptocurrency exchange operating in the country.
Thus, in September last year, the SBI Virtual Currencies completed its business registration process with the Financial Services Agency.
In January this year, Coincheck confirmed that it had been hacked confessing that around 523 million tokens had been stolen. This raised security concerns for cryptocurrency exchanges in Japan thus leading to the postponement of the launch of VCTRADE.
Another reason for the delay in announcing VCTRADE may have been caused by the cancellation of SBI’s Virtual Currencies partnership with Huobi crypto exchange. The cancellation led to SBI losing out on the use of Huobi’s financial and technological resources to launch the crypto exchange.
This is not the first SBI’s investment in cryptocurrency. The bank has a 40% stake in the Taiwanese cryptocurrency hardware wallet CoolBitX. It also has a significant stake in bitFlyer, the Japanese biggest exchange.
Speculation is high that VCTRADE and SBI Holdings might use CoolBitX cold-wallet technology to store customers cryptocurrency holdings.
SBI Holdings has approximately 46 subsidiaries under its wings. Its business is categorized into three main branches, Asset Management, Financial Services, and Biotechnology Related Business.