Despite recent volatility in the cryptocurrency market, Nomura is preparing to start a new company to help institutional clients diversify into cryptocurrency, decentralised finance (DeFi), and non-fungible tokens (NFTs). By the end of 2024, Japan's largest investment bank will most likely integrate a number of digital asset services under a single wholly-owned company with roughly 100 employees. The announcement of Nomura's plans, which have been in the works for four years, comes as the value of some of the world's most well-known cryptocurrencies has plummeted, raising fears about the entire sector.
According to a report in CoinDesk, the unit's newly appointed CEO Jez Mohideen said that for starters they would be looking at the “top 10 cryptocurrencies by market capitalization”.
Mohideen added that then they will move further down the market cap chain to evaluate what opportunities there are based on institutional demand. So, if DeFi protocols are introduced in their own launch pads, they will look to make markets there as well.
While banks have been experimenting with cryptocurrency for some time, many have limited themselves to derivatives or exchange-traded products trading or undertaking research into various sorts of digital assets. Nomura was one of the first to examine the preservation of crypto assets through the Komainu custody consortium, which also included investment firm CoinShares and storage expert Ledger, and was also one of the first to state that it intends to go deeper into the ecosystem.
According to Mohideen, NFTs will appear later and only as a carefully evaluated business opportunity focusing on the intersection of so-called Web 3 and traditional finance (TradFi).
Nomura joins the ranks of Goldman Sachs, Citigroup, Bank of New York Mellon, and other large financial organisations that have recently entered the cryptocurrency industry.
Despite the concerns, Nomura executives indicated that institutional clients' interest in digital assets was high and will continue to expand as the market for cryptocurrencies, NFTs, and other assets became more appealing as a way to diversify more traditionally run portfolios.