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Japan’s Daiwa Capitalizes on Crypto Boom, Secures 10% Stake in Singaporean Startup

Japan’s Daiwa Securities has decided to acquire a 10% ownership stake in Singapore-based crypto startup Penguin.

In a press release Monday, Daiwa cited a growing trend of affluent individuals and institutional investors investing more in the crypto market.

The Japanese financial services firm said Penguin Securities is currently seeking regulatory approval for dealing in crypto and offering broker-dealing services related to capital market products. Meanwhile, another subsidiary of Penguin intends to specialize in providing crypto derivatives.

Daiwa to Bolsters Penguin’s Crypto Exchange Ambitions

Through the partnership, Daiwa will offer Penguin its expertise in high-net-worth businesses and financial support. In return, Penguin will share its expertise in crypto and new alternative assets with Daiwa.

Daiwa did not reveal financial details of the partnership, but it has reportedly invested over 1 billion yen ($6.65 million) in Penguin, acquiring a stake of more than 10% in late February.

Penguin plans to introduce crypto derivatives by the end of 2024, and expand its operations to include crypto exchange and brokerage services later.

“Through this alliance, we hope to form a strong business partnership with Daiwa Securities Group and accelerate the expansion of our business in Asia and globally, aiming to share our knowledge on crypto assets, digital assets, and co-create a next-generation financial ecosystem,” Kentaro Kawabe, CEO of Penguin Securities HD, said in a statement.

Japan Opens Doors to Domestic VC Investment in Web3

Japanese lawmakers have generally embraced cryptocurrencies as significant aspects of fintech advancement. The central bank and the Financial Services Agency have provided explicit guidance to businesses using blockchain components such as stablecoins and decentralized autonomous organizations (DAOs).

Last month, the Ministry of Economy, Trade and Industry announced that the Japanese cabinet approved a proposal permitting domestic venture capitalists to invest in Web3 startups. This legal change will allow Japanese VCs to engage in projects that issue virtual currencies, an area previously restricted to international investors.

Daiwa has ventured into the crypto space before. Last year, it invested in pafin, the company behind cryptact, a service for crypto accounting and profit calculation. Additionally, earlier this year, Daiwa participated in issuing digital bonds using blockchain technology.

The company says it has focused on crypto and digital securities since 2016 and has been actively involved in projects aimed at assessing commercialization in this area.

In 2018, Daiwa founded a subsidiary named Fintertech Corp, which commenced providing Japan’s inaugural crypto asset-backed loans in 2020.

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