- Japan’s largest bank, MUFG, has partnered with startup Ginco to provide an enterprise wallet solution, marking its re-entry into the crypto space following regulatory changes.
- MUFG is also initiating a crypto study group involving nine companies, aimed at exploring token allocations and vesting for institutional investors as part of crypto trusts.
The Resurgence of MUFG in the Crypto Domain
Mitsubishi UFJ Financial Group (MUFG), Japan’s banking behemoth, has made a significant pivot back into the realm of cryptocurrency. The bank recently announced its strategic partnership with fintech startup Ginco, laying the groundwork for an enterprise-grade wallet solution specifically designed for MUFG’s crypto asset trust services. It’s a notable development, particularly because the bank had previously put a halt on its crypto services due to government-enforced bans.
The regulatory landscape shifted in October 2022, when Japan enacted legislation permitting trust banks to offer crypto custody services. This change was in response to a growing trend of institutional crypto adoption in global markets, a wave Japan is keen not to miss.
MUFG is no stranger to blockchain technologies, being the progenitor of Progmat—a security token platform that has diversified into the domain of stablecoins and utility tokens. The current partnership with Ginco indicates a resolute focus on leveraging crypto assets in a new regulatory environment that’s more conducive to institutional engagement.
Tax Implications and the Utility of Crypto Trusts
The legislative alterations carry noteworthy tax implications. Previously, companies issuing tokens and holding onto them would incur tax liabilities based on unrealized profits. This is no longer the case. From a deductive standpoint, this change augments the advantages of establishing crypto trusts, particularly for institutional investors.
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Certain institutional entities, such as limited liability partnerships, face restrictions against direct investment in cryptocurrencies. However, these limitations can be circumvented via crypto trusts, where tokens vest over an extended period. This strategy not only broadens the scope of potential crypto investors but also adds a layer of financial flexibility and risk mitigation.
MUFG’s Multi-Dimensional Crypto Study Group
To further explore the strategic depths of crypto adoption, MUFG is initiating a crypto study group that brings together a consortium of nine diversified companies. Among them are Ginco, Shinsei Corporate Investment—a subsidiary of SBI, and Financie—a firm specializing in sports fan tokens and reminiscent of Europe’s Chilliz/Socios. This collaboration aims to scrutinize token allocations and vesting schedules suitable for institutional-level trusts.
In addition to this, MUFG continues its exploration of blockchain interoperability, having recently invested in DataChain. The bank is also working on projects related to security tokens in collaboration with Progmat and NTT Data, a key infrastructure player in the Japanese bond market.
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