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

Source: The Funding; Compiled by: Jinse Finance Claw

In 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 funding round and EDX Markets’ $76 million Series C funding round.

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

In addition, SBI recently also participated as a co-investor in Digital Asset’s $355 million funding round, Morpho’s $175 million token round, and Circle’s $222 million token presale for its Arc blockchain, as well as a number of other investments.

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

SBI is no stranger to crypto, having invested in the sector since 2016. But the frequency and scale of its recent moves have been particularly striking. Why is SBI pouring so much money into crypto now? What considerations lie behind these moves? And what signals do they reflect about traditional financial institutions’ interest in digital assets and the trend toward institutional adoption?

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

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

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

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

Joseph Goh, director and head of the Asia-Pacific region at crypto investment bank and advisory firm Areta, said that SBI is pursuing a strategy that few traditional financial groups have tried.

Goh said: “SBI is doing something other financial groups in Asia haven’t 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 layout, 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 SBI’s distribution channels controlled through Bitbank and Coinhako, “we’re seeing the beginnings of Asia’s first large-scale on-chain asset management business,” Goh said. “The key is that SBI is not buying crypto asset exposure—it is 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, the distribution of USDC in Japan through its joint venture with Circle, and SBI Shinsei Bank’s addition of the Partior blockchain network supported by JPMorgan to issue tokenized deposits for cross-border payments.

Goh said: “Whoever controls the yen leg in on-chain settlement could secure a strategic foothold in Asia’s financial future—and that is exactly the system SBI is building.”

Why now?

One reason is that Japan is comprehensively reforming its regulatory framework, shifting crypto assets from payment instruments to regulated financial instruments on par with stocks.

Last month, Japan’s lower house advanced a bill that classifies crypto assets 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 passing the upper house, and from 2028 it will reduce the maximum capital gains tax rate on crypto assets from the current 55% to 20%, aligning with stocks and bonds.

Animoca Brands co-founder and executive chairman Yat Siu 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 the crypto space so it can be ready as adoption of digital assets accelerates.

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

Bucella said: “If you’re planning a long-term layout like SBI, you’d want to enter the market during the cycle’s low point, because these 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 been deployed in real-world service delivery. The spokesperson said that Gauntlet’s risk management and optimization technology is crucial 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’re committed to,” they added.

For Gauntlet, the relationship is far more than just funding support. When asked about the strategic value SBI brings beyond capital, 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 in global financial services will support the company in expanding 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 work, and brokers, to jointly explore opportunities to advance institutional market infrastructure.”

Will other institutions follow suit?

Most of the executives I interviewed expect that in the coming months and even years, more traditional financial institutions will take similar steps, even if the pace may depend on the regulatory environment in each market and on customer needs.

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

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

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, funds management, collateral optimization, and on-chain capital markets.

Notably, Animoca’s Siu said he has learned that some “big” crypto trading deals that traditional financial institutions are exploring are already underway, and he expects more such deals to emerge as tokenization becomes an even larger strategic focus across the industry.

Siu said: “I expect to see more and more big deals.” He added that he cannot think of any large financial institutions that are not paying attention to crypto or digital assets in some form or another.

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

Risk factors

Despite the optimistic outlook, SBI’s strategy is not without risks.

Siu said a great deal depends on how quickly the regulatory framework continues to develop and how quickly institutions accelerate their adoption of digital assets. If regulation takes longer than expected, realizing current investment returns may also take longer.

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