Why is Japan’s financial giant SBI making a major push to increase its crypto investments?

Source: The Funding; Compiled by: Jinse Finance Claw

Over the past few weeks, Japan’s financial giant SBI Holdings has completed a series of major crypto investments.

Earlier last week, it became the sole investor in Gauntlet’s $125 million Series C round and EDX Markets’ $76 million Series C round.

Last month, it agreed to acquire Japan’s crypto exchange Bitbank for nearly $289 million, and in February it acquired a controlling stake in Singapore’s crypto exchange Coinhako.

In addition, SBI has recently participated in Digital Asset’s $355 million funding round, Morpho’s $175 million token round, Circle’s $222 million token presale for its Arc blockchain, and multiple other investments.

Last month, SBI launched JPYSC, Japan’s first yen stablecoin backed by a trust bank.

SBI is no stranger to crypto; it has been investing in the sector since 2016. But the frequency and intensity of its recent moves are especially striking. Why is SBI making such a large push into crypto now? What considerations are behind these initiatives? And what signals do they reflect about traditional financial institutions’ interest in digital assets and the trend of institutional adoption?

Taken together, these recent SBI deals point to a broader strategy centered on on-chain finance.

A spokesperson for SBI told The Block: “Within the SBI Group, we are driving a group-wide shift to the on-chain transformation and expanding our digital asset business to meet the next phase of growth. In the on-chain space, our goal is to provide end-to-end functionality—from exchanges and asset tokenization to market platforms. Our recent acquisitions, investments, and partnerships are all part of this group-level strategy.”

The spokesperson said that the “full arrival of the token economy” is “urgent”—a world in which all assets are tokenized, and trading, settlement, and the execution of various contracts are all carried out on blockchain.

The spokesperson added: “The SBI Group is committed to establishing itself early on in the fast-evolving digital asset space as a leading global company.”

Joseph Goh, a director and head of APAC at crypto investment bank and advisory firm Areta, said that SBI is pursuing a strategy that few traditional financial groups have attempted.

Goh said: “SBI is doing something that other financial groups in Asia have not tried: building an end-to-end digital asset franchise covering issuance, settlement, market infrastructure, asset management, and retail distribution—and doing it with a cross-border footprint, not limited to the domestic market.”

He pointed out that one of the clearest threads is asset management. By combining Gauntlet’s institutional-grade on-chain capabilities with the distribution channels SBI controls through Bitbank and Coinhako, “we’re seeing the early shape of Asia’s first large-scale on-chain asset management business,” Goh said. “The key is that SBI isn’t buying crypto asset exposure—it’s buying the infrastructure of the next-generation financial system.”

Goh believes settlement is another major focus. He cited SBI’s launch of the JPYSC stablecoin, distribution of USDC in Japan through its joint venture with Circle, and SBI Shinsei Bank’s participation in the Partior blockchain network supported by JPMorgan Chase to issue tokenized deposits for cross-border payments.

Goh said: “Whoever controls the yen leg in on-chain settlement may secure a strategic position in the future of Asian finance—and what SBI is building is exactly that system.”

Why now?

One reason is that Japan is overhauling its regulatory framework, moving crypto assets from being payment tools to becoming regulated financial instruments on par with stocks.

Last month, Japan’s lower house advanced a bill that classifies crypto as financial instruments, paving the way for products such as exchange-traded funds (ETFs), while also introducing stricter trading and disclosure rules. The legislation is expected to take effect next year after approval by the upper house, and starting in 2028 will reduce the maximum capital gains tax rate on crypto assets from 55% currently to 20%, aligning it with stocks and bonds.

Yat Siu, co-founder and executive chairman of Animoca Brands, said SBI appears to be positioning itself ahead of these changes. He believes the company is not waiting for regulation to become clearer; instead, it is building capabilities across crypto so it will be ready when digital asset adoption accelerates.

Siu and others also pointed to the current market environment. Quynh Ho, head of GSR Ventures, and Mike Bucella, co-founder and managing partner at Neoclassic Capital, said that bear markets often provide the best long-term investment opportunities because valuations are lower and trading competition is smaller.

Bucella said: “If you’re planning a long-term layout like SBI, you want to enter the market at the bottom of the cycle, because those deals will become extremely valuable when the market cycle turns and the industry expands over the next decade.”

SBI’s spokesperson said the company looks for startups whose innovative technologies have already been deployed in real-world services. The spokesperson said Gauntlet’s risk management and optimization technology is critical to on-chain finance, while EDX Markets, as an institutional crypto exchange, helps traditional financial institutions enter the digital asset market. “Both provide indispensable functionality for the broader adoption of digital assets we are working toward,” they added.

For Gauntlet, the relationship goes far beyond capital support. When asked about the strategic value SBI brings beyond funding, co-founder and CEO Tarun Chitra said: “Primarily distribution and market access.” He said SBI’s business footprint in Japan and across Asia will help Gauntlet expand its platform to financial institutions, fintech companies, and tokenization projects—areas that are difficult for Gauntlet to reach on its own—including expanding its stablecoin coverage from stablecoins supported by the U.S. dollar and euro to currencies such as the Japanese yen and the Mexican peso.

EDX Markets also sees similar strategic value. CEO Tony Acuña-Rohter said SBI’s network across global financial services will support the company’s expansion of its trading, clearing, and settlement capabilities.

Acuña-Rohter said: “We are actively engaging with SBI’s broader digital asset ecosystem, including market makers, stablecoin projects, tokenization initiatives, and brokers, to explore opportunities to advance institutional market infrastructure.”

Will other institutions follow?

Most executives I interviewed expect that over the coming months and even years, more traditional financial institutions will take similar steps, although the pace may depend on regulatory environments across different markets and customer needs.

This shift has already begun, and recent on-chain moves by traditional finance giants such as Intercontinental Exchange, the owner of the New York Stock Exchange, as well as Citigroup and Morgan Stanley, are clear proof.

Chitra said: “We expect institutions in jurisdictions with clearer regulatory frameworks to act first. Brokers and asset management firms with large retail customer bases will naturally be the next to follow.”

Ho of GSR also expects institutional activity to concentrate in areas with clear use cases, including stablecoins and payments, tokenization of real-world assets, institutional trading infrastructure, prediction markets, capital management, collateral optimization, and on-chain capital markets.

Notably, Siu of Animoca said he has learned that some “large” crypto trades are being explored by certain traditional financial institutions, and he expects more deals of this kind to emerge as tokenization becomes an even bigger strategic focus across the industry.

Siu said: “I expect to see more and more large deals.” He added that he can’t think of any large financial institution that isn’t paying attention to crypto or digital assets in some form or another.

Goh of Areta said this trend is becoming increasingly evident in Asia. He pointed out that South Korea is the next market worth watching, and added that diversified financial groups that combine banks, securities, and retail distribution are best positioned to emulate SBI’s approach. Goh also said digital assets have become a strategic priority for banks, asset management firms, exchanges, and payments companies in the region—stablecoins and payments leading institutional interest, followed by institutional trading, asset management, and market infrastructure.

Risk factors

Despite an optimistic outlook, SBI’s strategy is not without risk.

Siu said much depends on how quickly the regulatory framework continues to evolve and how quickly institutions adopt digital assets. If regulation takes longer than expected, realizing the current investment returns may also take longer.

“Execution is the real test,” Goh said. He noted that SBI’s acquisition strategy helps mitigate some integration risk, because both Bitbank and Coinhako operate regulated crypto exchanges, and the company’s own minority equity investments also carry relatively limited integration risk.