Nomura Digital Asset Division to Focus on Top Crypto, Wary of Stablecoins

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In a win for the crypto industry, Japanese financial holding company Nomura, which includes an asset management and investment bank division, announced on Tuesday that is was setting up a digital asset division.

Nomura’s newly created digital-asset subsidiary launches later this year and will initially focus on the top cryptocurrencies, said the unit’s newly appointed CEO of Nomura, Jez Mohideen in comments reported today.

The new division will be established in Europe. It plans to get involved with decentralized finance (DeFi) and non-fungible tokens (NFTs) at a later date and will be looking to make markets in both sub-sectors of crypto. But for now it is concentrating on the most liquid market, which means the top 10 biggest digital assets by market cap.

“Then basically, we’ll go down further the market cap chain to see the opportunity based on institutional demand. So, also looking at DeFi protocols, if these get launched in our own launch pads, we will look to make markets there as well,” Mohideen said.

Nomura Sees New Opportunities in Crypto

This isn’t completely unknown territory for Nomura, given the fact it was one of the first investment banks to explore safekeeping of crypto assets through the Komainu custody consortium, with plans to further diversify their portfolio through DeFi and NFT markets in the future.

Nomura’s approach to DeFi will be focused on institutionalization through DeFi pools that offer know-your-customer (KYC) and whitelisting, similar to Aave Arc.

“We will be aiming to bring trust into this ecosystem,” Mohideen added.

Mohideen also talked about the company’s plans regarding NFTs: “It’s at an early stage with NFTs, but we want to explore the infrastructure side, whether its collateral financing and seeing the opportunity that exists there,” he added.

Market Turmoil – Time to Buy More Crypto?

Nomura’s latest plans were announced at a time when the cryptocurrency sector is suffering from the tightening financial conditions and growing fears of a recession. However, some investors clearly see the current market pullback as an opportunity to buy more digital assets, presumably after coming to the conclusion that macro headwinds are likely transitory.

Moreover, the market has been shaken by the collapse of the algorithmic stablecoin TerraUSD (UST). Mohideen declined to associate its crypto businesses with any particular stablecoin at this moment.

“I think any true stablecoin needs to be fully backed by fiat and collateral. They will need to be correctly audited and that will bring its own risk rating. Based on that, we will make our choices.”

The Japanese company has already started offering bitcoin over-the-counter (OTC) derivatives to clients, executed on the CME by crypto-asset trading firm Cumberland DRW.

The Asian financial giant believes that working with institutional-level counter-parties will help it to scale into the rising demand from big clients to get more crypto exposure.