Ripple Partner SBI Holdings Collabs With Japan’s 2nd Largest Lender SFMG on Digital Banking
An agreement between the Sumitomo Mitsui Financial Group (SMFG) and SBI Holdings will see both entities collaborate to provide banking services on smartphones. SMFG, which is currently Japan’s second-largest lender by assets is expected to pump a significant investment towards SBI’s Neo Mobile securities. This venture is worth billions of yen and 20% of the stake will be owned by SFMG upon the acquisition scheduled for June 2020.
According to the publication on Nikkei newspaper, the deal involves millions of dollars and the first phase is expected to be complete this week. Notably, this precedes the Golden Week holiday in Japan.
Apart from the 20% stake acquisition in Neo Mobile securities, the SFMG is expected to pump and an additional $1 billion towards SBI holdings this year. The funds are to be directed in investments within 5G, Blockchain, and FinTech amongst other emerging technologies.
SBI holdings is likely to benefit from this investment given the capital to scale up its asset base. The firm has had close ties with XRP given its CEO, Yoshitaka Kitao, who sits in Ripple’s board. Such existing relationships coupled with new and stronger alliances with the likes of SFMG further places SBI ahead of its peers. While SFMG seems to be doing most of the heavy lifting with capital injection, the Japanese lender will undoubtedly increase its foothold in the emerging tech space.
These developments come amid a new regulatory framework for crypto firms operating within Japan. The country’s House of Reps updated the laws governing digital assets and crypto exchanges back in 2019. This was done through the Exchanges Act and Payment Services Act which are expected to take effect on May 1, 2020.