In the third quarter, SBI made several moves that illustrate its growing bet on digital assets. First, in September its subsidiary SBI Remit said that it had expanded its services using Ripple’s XRP to bank accounts in the Philippines, Vietnam and Indonesia. By leveraging XRP as a bridge currency and partnering with its affiliate SBI VC Trade, SBI Remit aims for faster and cheaper money transfers that can boost adoption of XRP in target markets. SBI Remit and Ripple are eyeing these Southeast Asian markets because of their growing remittance flows.
Second, in November, SBI announced two new funds dedicated to digital assets. One of these will be co-managed with Standard Chartered and focus on the United Arab Emirates. SBI and Standard Chartered will deploy US$100 million to invest UAE ventures covering a wide variety of digital asset segments, from consumer payments and tokenization to risk management and compliance tools. Separately, SBI also launched a 100 billion yen (US$660 million) fund dedicated to investing in AI, Web3 and other fintech startups. The fund has reportedly already received more than 50 billion yen (US$331 million) in commitments from Sumitomo Mitsui Banking Corporation, Mizuho Bank, Nippon Life Insurance and Daiwa Securities Group.
Further, SBI also seems to be betting big on the growth of stablecoins. In late November, it announced it would collaborate with Circle to facilitate the adoption of USDC and Web3 services in Japan. This tie-up also aligns with the Japanese government's revisions to the Payment Services Act in June 2023, establishing regulations for stablecoins. Circle anticipates these regulations will encourage the issuance and circulation of stablecoins in Japan, fostering the country's transition toward a Web3 economy.
As part of the initiative, SBI is seeking registration as an electronic payment instruments service, pending approval from Japanese authorities, to introduce USDC circulation in Japan. SBI officials view this step as instrumental in promoting widespread stablecoin adoption within the country.
SBI’s big bet on stablecoins could prove to be a prescient move – but there is also a risk that the company is jumping the gun. Price volatility remains a significant hurdle for stablecoins to overcome as well as inconsistent regulation. In particular, the skepticism shown towards stablecoins by financial regulators in the United States, China and India will limit their growth.