After two years of development, one of Japan’s largest investment banks has finally entered the digital asset custody business through a joint venture with two cryptocurrency startups.
Komainu, a venture involving Nomura Holdings, its unit CoinShares and Ledger, officially launched Wednesday. Based in the U.K.’s Jersey Channel Islands, the new business serves as a custodian and provides regulatory compliance and insurance services to institutional investors for their digital asset holdings.
CoinShares CEO and co-founder Jean-Marie Mognetti, who will run Komainu as well, said in a press release the venture will cater to traditional institutional investors such as banks, pension funds and mutual funds that want to enter the digital asset market.
“Komainu has created the first turnkey solution that establishes the trust required by institutions to gain exposure to digital assets,” said Mognetti.
CoinShares, a digital asset trading platform, announced the venture with Ledger, the blockchain security firm, and Nomura, back in 2018.
Komainu is named after the statues of mythical “lion dogs” that guard the entrances to Japanese Shinto temples. Mognetti claimed the new custodial service offers the same level of security as cold storage solutions (where private keys are kept offline, on a device disconnected from the internet or a piece of paper locked in a safe) while allowing for the speed and user flexibility of online “hot” wallets.
Mognetti said this was made possible by using a “bespoke Ledger-designed solution,” which combines hardware and software applications and is underpinned by a hardware security module (HSM), a physical device that stores and manages digital encryption keys.
Komainu’s platform supports 20 cryptocurrencies, including bitcoin, ethereum, litecoin, and XRP. Mognetti said that while Komainu can support most protocols on the technological side, the firm would only take on tokens which satisfy anti-money-laundering requirements and have an identifiable origin. Komainu is regulated by the Jersey Financial Services Commission.