Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Japan-based financial services firm SBI Holdings launches a cryptocurrency fund with major domiciliation of 50% in XRP.
In today’s world where digital currencies have permeated the financial services terrain, determining the cryptocurrency goes beyond categorization by their respective market capitalizations. With over 2500 cryptocurrencies out there, it is easy to single Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and Ripple’s XRP as the biggest cryptocurrencies but sorting between this top cryptocurrencies will involve much more than the market cap. While a ranking made by a Chinese Institute in June ranks EOS ahead of other coins based on predefined criteria, XRP is being favored by SBI Holdings, a Japanese financial services firm. In its bid to establish the first-ever crypto fund in Japan, the Strategic Business Innovation Group plans to have 50% of the assets domiciled in XRP, 30% in Bitcoin (BTC) and the remaining 20% in Ethereum (ETH). This will help re-establish the acceptance of XRP since losing its position as the third-largest cryptocurrency to USDT by market cap.
About the SBI Holdings Crypto Fund
SBI Holdings has pioneered a lot of new services of which the proposed cryptocurrency fund is one. As the first of its kind in Japan, the fund takes a great deviation from the UNICEF Cryptocurrency fund model in which the top three cryptocurrencies will be utilized against the UNICEF fund that prioritizes only Ethereum (ETH).
According to the company’s business presentation material published on June 26, the fund will be “providing individual investors with a crypto-asset fund that embodies the resources of the SBI Group”. In addition, SBI stated that “crypto-assets, which have a low correlation to traditional assets such as stocks, bonds, etc., enhance the effectiveness of diversification”. While the SBI Alternative Investment Co Ltd subsidiary will establish and manage the crypto fund, the SBI subsidiary SBI VC Trade will be tasked with the responsibility of custody of the digital currencies (XRP, BTC, and ETH).
Ripple is a real-time gross settlement system, currency exchange, and remittance network created by Ripple Labs Inc., a US-based technology company. Released in 2012, it is built upon a distributed open-source protocol and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flier miles or mobile minutes. Ripple purports to enable secure, instantly and nearly free global financial transactions of any size with no chargebacks.
Ripple Labs that widely uses XRP in its solutions has been so forthcoming in establishing key alliances to drive the coins network value. Behind the backdrop of XRP taking the larger allocation is the probable influence of Yoshitaka Kitao, who is both a member of the Ripple board and the CEO of SBI Holding. Undoubtedly, Yoshitaka believes in the Ripple project and its potential to help create a payment network as has never been seen before.
Undeterred by its fall in ranking to Tether, Ripple’s strategic alliance which extends to the Brazilian Central Bank has the potential to resuscitate the cryptocurrency’s position as a formidable digital payment network, a factor important to help it regain its position in a short possible time.
Future of Digital Currencies
With the meteoric rise of government-backed Central Bank Digital Currencies (CBDCs), one may worry about the future fate of digital assets like BTC, XRP, and others. The extensive integration of these coins to businesses and the economy today will go a long way in determining how easy it would be for the coins to fade out. Initiatives like SBI Holdings crypto fund will go a long way in establishing these coins’ stake in today’s financial service sector.