Nomura to launch new crypto to sub-unit as competition rises – report

Saif Naqvi
Source: Pixabay

Worldwide adoption of cryptocurrency remains headstrong despite the many challenges faced by the industry this year. A couple of days after launching Bitcoin derivatives, Japan’s Nomura is reportedly going to create a new crypto subsidiary to provide more institutional access to its users.

According to a Financial Times report, Nomura will create a new sub-unit to help its institutional clients gain more exposure to cryptocurrency, DeFi projects, and NFTs. The new firm will look to employ a workforce of around 100 individuals by 2023 end, as per FT.

The development is part of a larger initiative by Nomura to gain more exposure in the crypto market as financial firms compete to heat up among worldwide financial institutions to rope in Just two days ago, Nomura began offering over-the-counter crypto derivates along with Bitcoin non-deliverable forwards and options to its clients.

“If we don’t do this, then it’s going to be more difficult down the line to be competitive,” a Nomura executive told FT on Monday morning. He also indicated that the opportunity cost of failing to offer investment facilities to institutional clients was high, despite the risks attached to digital assets.

Do institutions look past Bitcoin’s volatility?

Bitcoin logged its second-worst week in 2022 between 9-15 May as its price fell to yearly lows. Following a weekend respite, Bitcoin’s price shifted into the red once again on Monday morning after sellers halted a recovery above $31,500.

However, some of Nomura’s competitors were unfazed by the chaos and seemed to make the distinction between price volatility and institutional adoption.

On Monday, Goldman Sachs and Barclays participated in a $70 Million funding round in British hedge fund billionaire Alan Howard’s crypto trading platform, Elwood Technologies. The seeding also included participation from Mike Novogratz’s crypto venture, Galaxy Digital. Following the deal, Elwood CEO James Stickland said

“We’re getting investment from financial institutions that aren’t expecting to get massive returns in 15 minutes. They’re investing in the infrastructure… think it’s a reassurance message.”