Mitsubishi UFJ Trust Bank and Ginco announced on August 31 that they have initiated a partnership to offer Japan’s first-ever trust services for crypto assets. This move comes as institutional investors globally are increasingly seeking custody services for digital assets.
Regulatory Landscape
Mitsubishi UFJ Trust Bank had previously secured two patents related to trust services for crypto assets, aligning with the enforcement of Japan’s Payment Services Act in April 2017. The bank has been a pioneer in the digital asset space, launching its digital asset issuance and management platform, “Progmat,” in March 2021.
The Progmat Platform
Progmat serves as an efficient and secure platform for issuing and managing digital securities. It digitizes various forms of ownership rights, including real estate, movable assets like cash and goods, intellectual property rights, and dividends.
Legal Amendments and Tax Reforms
Recent legal amendments in October 2022 have made it possible for trust banks in Japan to offer custody services for crypto assets. Additionally, tax reforms approved in December 2022 have confirmed that crypto assets meeting certain criteria will be exempt from end-of-term market valuation, potentially increasing the demand for crypto asset trust services.
Ginco’s Role
Ginco, a company providing infrastructure for the safe and secure use of digital assets, will contribute technical expertise required for token management on public blockchains. The company is known for its “Ginco Enterprise Wallet,” which boasts the highest adoption rate among business-use crypto wallets in Japan.
Implications for the Market
The collaboration between Mitsubishi UFJ Trust Bank and Ginco is expected to fill a significant gap in the Japanese market, where institutional investors have been keen on diversifying their portfolios with crypto assets but lacked a regulated framework for doing so.
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