“Strongest Spread”: The Onrush of the SBI Cryptocurrency Exchange
“This overwhelming spread is the strongest. As a result, others won’t profit and will cease to enter the industry. The Financial Services Agency will be able to eliminate the need for screening. “
SBI Holdings (HD) held its financial results briefing for the first quarter of 2018 (April ~June) on July 31. The company has an overwhelming customer base as the largest internet securities / internet bank. As an odds-on favorite of the cryptocurrency exchange industry, lots of attention was placed on the remarks of the representative, Yoshitaka Kitao.
In the previous briefing held in April, the company stated that it would announce its decision regarding the SBI Exchange by summer. Surely enough, the service began in June. Let’s see how the service has been progressing since its launch.
“Landslide Victory”
SBI Group’s cryptocurrency exchange, SBI Cryptocurrencies, launched transactions on June 4 with the handling of Ripple (XRP) for those who made advanced reservations. It then began handling Bitcoin Cash (BCH) on June 11, and Bitcoin (BTC) on June 18.
Its strongest selling point is the cheap trading fee. When currencies are traded, the “spread” is the difference between the selling price and the bid price, and is the fee that the exchange collects. By setting an overwhelmingly small spread, the company aims to be the number 1 exchange. President Kitao is also confident that it possesses the “best spread in the industry.”
In addition, the trading environment uses a trading system with a track record in SBI Japan Next Securities’ PTS (Proprietary Trading System). It is the same system used in NASDAQ in the United States, and is said to be the world’s best trading environment .
It began accepting applications for the new account openings on July 17. Even though it has not advertised extensively, the number of applications is increasing rapidly.
Blockchain “ecosystem” is “almost complete.”
Furthermore, President Kitao emphasized the progress of the “digital asset ecosystem,” centered on blockchain technology. The recent announcement shows that the company has been funding at least 20 domestic and international blockchain related technology companies (including funding outside of the SBI Group and partners, as well as those still under adjustment).
Regarding management of wallets that store cryptocurrencies, the company started a partnership with nChain in the UK, and funded the Taiwan-based CoolBitX as well as a Swiss company. CoVenture and Clear Markets in the United States are planning to launch services on the premise that institutional investors will enter in the future .
In addition, it announced Orb, which possesses platform development technology, and “S Coin Platform,” a concept that involves remittance and settlement services using blockchain. Corporate groups and participating regions can issue their own local currencies and can also exchange the local currency as well as circulating cryptocurrencies on the same platform.
The company management aims to acquire people in the younger generation who are interested in cryptocurrencies, and mutually refer customers to its existing financial services (securities, bank, and damage insurance). Furthermore, the company aims to expand into other industries by accelerating synergies within the digital asset ecosystem by building not only the technology for constructing exchanges, but also platforms for remittance and settlement, and by investing in mining cryptocurrencies.
“Objecting for the Expansion of the Industry”
The preparations at the SBI Exchange look complete. However, it won’t go full-speed yet. President Kitao revealed that he is planning a large-scale promotion of TV commercials to win an overwhelming share, but avoided discussing the specific details on when this would begin.
The reason for that was the administrative disposition handed down to six registered cryptocurrency exchanges by the Financial Services Agency on June 22. President Kitao expressed that the entire industry should prioritize customer benefits, and as a result, believes that voluntary regulations should be given priority.
Regarding the self-regulation proposal by the Japan Cryptocurrency Exchange Association (JVCEA), on which President Kitao serves as a Director, he claims that “The self-regulating organization has yet to be decided,” and that the JVCEA has applied to be a self-regulating organization to the Financial Services Agency.
“Cryptocurrency is quite revolutionary and is an area of opportunity for Europe and the United States. Strange regulations that destroy this should not be allowed. Regulations that are reasonable for everybody should be adopted. I will continue to object for the industry. “(President Kitao)
In comparison with major countries, the regulation on cryptocurrencies is said to be loose in Japan. It seems that the authorities and officials are continuing to search for an ideal balance between user protection and innovation. During all of this, the SBI group has maintained a strong presence. It is likely that they will continue to dominate the cryptocurrency industry.
