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Japan's Nomura continues its investment spree in blockchain

posted onOctober 8, 2019

Nomura Holdings, the parent company of Nomura Securities, has signed a final agreement with chat giant LINE and LVC Corporation to form a financial business partnership that focuses on blockchain technology. 

The terms of the deal have not been shared publicly. 

In a press release dated Oct. 4, Japan’s oldest brokerage firm said it made an investment in LVC, a subsidiary of South Korean-controlled Line, following the agreement signed on Sept. 24.

The partnership will make use of Line’s large user base - over 81 million monthly active users in Japan- and Nomura’s extensive financial experience and expertise. 

The release also mentions LVC’s Bitmax cryptocurrency exchange, which went live on Sept. 17, less than two weeks after being approved by Japan’s Financial Services Agency (FSA).

Nomura has been on an investment spree in the blockchain sector. In May 2018, the Tokyo-based company created a new business venture dubbed Komainu with Ledger, cryptocurrency wallet, and security service provider, and Global Advisors, in order to develop digital custody solutions. 

In July 2019, Nomura invested in Quantstamp, a San Francisco-based smart-contract security firm. Quantstamp uses computer-based reasoning tools to provide services that help identify and secure vulnerabilities in smart contracts — a key component of blockchain technology.  

Last month, Nomura Holdings and Nomura Research Institute (NRI) set up a joint venture company named Boostry to build a blockchain platform for trading financial securities. The Boostry has kicked off with $11 million capital. 

Nomura Financials

Just last week, Nomura and five other brokerage firms, namely Rakuten Securities, SBI Securities, Monex, Daiwa Securities and Securities, formed the Japan STO Association, a self-regulatory organization (SRO) for cryptocurrency token offerings.

“The Japan STO Association intends to consolidate expertise on securities businesses from among securities companies and other entities so that the STO business opportunities can be explored and developed in Japan. The association also strives to ensure compliance of laws and regulations as well as investor protection, while preventing illegal activities including unfair trading and money laundering” Monex said in a statement. 

Although Japanese regulators have been carefully monitoring crypto businesses due to the 2014 collapse of Tokyo-based Mt Gox exchange which was responsible for more than 70% of bitcoin transactions at its peak and the $534 million hack of Coincheck in January 2018, recent developments indicate that they are welcoming new crypto projects. 

In addition to providing licenses to new digital currency exchanges, the FSA has issued guidelines on digital asset fund investment. 

Japan’s biggest brokerage traces its origins back to the late 1800s when Tokushichi Nomura I, set up a money changing business in Osaka. Tokushichi's son, Tokushichi Nomura II, a wealthy businessman and investor, would later take over his father's business and in 1925 founded Nomura Securities Co., Ltd. (NSC) with 84 employees.

NSC gained the authority to trade stock in 1938, and went public in 1961. 

Under its corporate mission, "We help to enrich society through our expertise in capital markets," the firm has grown into a leading financial services group with a global network spanning over 30 countries and 28,048 employees.

UPDATE 02/12/2019

Nomura Holdings CEO Koji Nagai will step down in April 2020 to become chairman of the board of directors, the Tokyo-based financial services group announced on Monday (Dec. 2). Nagai, who has served seven years as the company's head, will be replaced by Kentaro Okuda, the current co-chief operating officer of Nomura Holdings and CEO of Nomura Holding America. Okuda joined the company in 1987.