New partnership plans to establish Japan-based joint venture
Coming off a successful first quarter, Digital Asset continues to build momentum with the announcement of a new strategic investor, SBI Holdings (SBI), a financial services group based in Tokyo, Japan. The announcement was made by SBI as part of its FY2021 full-year results on May 27, 2022 in Tokyo.
SBI’s investment follows Digital Asset’s Series D financing round which closed in April, 2021 and brought in $120 million of capital from private equity firms 7RIDGE and Eldridge. In addition to the investment, SBI announced it has agreed to establish a joint venture (JV) with Digital Asset. The JV is expected to formally launch in 2022 and operate under equal ownership within the Japanese and East Asian markets.
One of the first initiatives on which Digital Asset and SBI are collaborating is to drive Digital Asset’s concept for programmable money into the Japanese market through a newly created 'smart yen' program, which will address key retail banking challenges around customer growth and retention. The smart yen concept for Japan takes the benefits of Daml and applies them to programmable money—a digital currency that has been coded to move between parties when predetermined conditions are met. When using Daml for smart yen, or any fiat currency, the technology is implemented as an overlay to the existing payment infrastructure, thus resulting in minimal disruption to current systems. Through this approach, core cash systems are able to execute condition-based payments or reward programs automatically, thereby encouraging consumers and merchants to transact. This provides valuable customer experiences for individual and merchant account holders and reduces costs, improving profit margins for retail banks.
Yoshitaka Kitao, President and Representative Director of SBI Holdings, said, “Digital Asset has excellent technology and business concepts. A new cash concept, ‘smart yen’, will make it possible to build a revolutionary, customer-oriented cash system by directly linking each individual customer loyalty program to deposits, and fully automating the process of providing loyalty through smart contracts. We expect to further accelerate the SBI Group’s digital transformation by actively introducing Digital Asset’s technology, including the stablecoin 'smart yen' concept.”
Yuval Rooz, CEO & Co-founder at Digital Asset added, “Daml smart yen creates additional opportunities for retail banks in Japan to develop innovative offerings, such as loyalty programs, vouchers, and other incentives to drive customer growth and retention. Daml provides a minimally invasive way for banks to enhance core systems and improve customer experiences, while at the same time increase profit ratios. We are excited to explore this concept further with SBI, especially as we get more active in the Japanese market.”
Smart yen is the first of several smart cash initiatives Digital Asset plans to develop in other countries. Digital Asset is also actively involved in key discussions about digital currencies, particularly central bank digital currency (CBDC), and the necessary frameworks needed to drive successful implementations. The company recently published a report with Dr. Giovanni Bandi, Fellow and Regulatory Genome Project Director at Cambridge University, about CBDCs for cross-border payments titled CBDC: From the Philosophical to Practical for Global Adoption.
Click here to read SBI’s PR.