In a strategic shift reflecting evolving priorities, Zodia Custody, a Standard Chartered-backed digital asset custody provider, has officially dissolved its joint venture with Japan’s SBI Holdings. The partnership, known as SBI Zodia Custody, began two years ago with the goal of delivering institutional-grade custodial solutions in the digital asset market.
Zodia and SBI: Decision Rooted in Strategic Alignment
According to Bloomberg, the decision to end the partnership was mutual. Julian Sawyer, CEO of Zodia Custody, stated, “This is a strategic alignment between SBI and ourselves as a mutual decision that we have other priorities and they have other priorities.” While the venture had held discussions with Japan’s Financial Services Agency (FSA) for local regulatory registration, no formal applications were submitted before this realignment.
Echoing this sentiment, SBI Holdings spokesperson Kosuke Kitamura affirmed that the dissolution marks a proactive step rather than a retreat. By redirecting their focus, SBI believes it can enhance group-wide synergies more effectively under its broader digital ecosystem goals.
Japan’s Challenging Regulatory Landscape
Japan’s cautious regulatory environment continues to pose significant challenges for foreign cryptocurrency firms. While a proposed 20% flat tax on crypto gains has received attention, industry insiders highlight that Japan’s rigid approval processes and complex regulations are the primary barriers to market entry and innovation. Maksym Sakharov, CEO of decentralized on-chain bank WeFi, commented that these hurdles drive startups and liquidity offshore, hampering growth in the sector.
Future Plans: Zodia’s Global Expansion
While ending its Japan partnership, Zodia Custody remains focused on expanding into more favorable regulatory regions. The company recently completed the acquisition of Tungsten Custody Solutions in the UAE, highlighting its preference for markets with supportive regulatory frameworks. This move emphasizes Zodia’s commitment to scaling its digital asset custody services amid shifting market dynamics.
Meanwhile, SBI Holdings continues to develop its digital ecosystem, with recent reports suggesting an interest in launching Japan’s first dual-asset cryptocurrency ETF. Although SBI later denied these plans, the company’s efforts remain aligned with fostering innovation in the digital finance space.
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