👺 SBI Launch an Exchange 📰 Coinbase Updates
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In the crypto world markets have been subdued. Exchange volumes are down week-on-week while prices are flat. BTC stuck around the $7,600 mark while ETH hovers around $600.
👺 SBI Launch Crypto Exchange
What’s the Story?
SBI Holdings launched a cryptocurrency exchange called VCTRADE. SBI Holdings are a Japanese financial institution. They launched the exchange through their subsidiary SBI Virtual Currencies.
VCTRADE is available to 20,000 beta users who signed up in October. The launch was delayed a few times due to the Coincheck hack, amongst other things. They plan to open up fully in July.
SBI were also in talks with China’s Huobi, but the partnership never went anywhere as SBI decided to build their exchange in-house, citing security.
It’s been reported that VCTRADE is using NASDAQs order matching technology. SBI has also mentioned that they are working with SECOM on wallet security. SECOM is a Japanese security company.
VCTRADE only supports XRPJPY at the moment but they plan to add BTC and BCH shortly. SBI is an 11% shareholder in Ripple which explains the prioritisation. There are no trading fees as of now.
Why Should I Care?
SBI is a registered banking institution in Japan. They are also one of the 16 entities approved by the FSA to operate cryptocurrency exchanges.
By all accounts, SBI is now the first legacy financial services institution to operate a cryptocurrency exchange.
This shows how powerful the Japanese government’s endorsement of cryptocurrencies has been. In addition to SBI, all of the major Japanese banks are rumoured to be working on their own initiatives such as exchanges and tokens.
If Japanese financial institutions can successfully operate robust exchanges then it’s only a matter of time before other countries begin warming up to the idea of regulating cryptocurrencies in a similar manner.
📰 Coinbase Updates
Coinbase announced that they are entering the Japanese market. They hired Nao Kitazawa who also sits on the board of the Fintech Association of Japan to run the operations.
Many are sceptical about how well Coinbase will be able to compete. In the US, Coinbase are well known for making purchases of cryptocurrencies very easy. However in Japan, there are already many exchanges, some of them even backed by banks.
It’s interesting to note that this comes a little after Kraken, another exchange exited Japan, citing high regulatory costs. From their blog post it appears Coinbase have every intention of working with the FSA, the local regulator
Coinbase’s announced that they are on track to becoming a registered broker-dealer in the US. This follows acquisitions of three existing financial institutions and the launch of products for insitutional investors.
Being registered as a broker-dealer will allow Coinbase to handle tokens that the SEC deems as ‘securities’. They’ve also shown ambition to tokenise existing securities and make them tradable via blockchain.
If they succeed in convincing the SEC then it could pave the way for things like instant settlement and 24/7 trading which would be a big shake-up for traditional capital markets.
🗞️ Extra Reading
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