Japan's SBI Group Invests $15 Million in Crypto Cold Storage Solution Firm, Tangem

Omar Faridi
  • Japanese financial giant, SBI Group invests in Tangem, a Switzerland-based hardware wallet manufacturer.
  • SBI Group has previously invested in CoolBitX and Sepior, both of which are cryptocurrency-related solutions providers.

SBI Group, a Tokyo-based financial services firm that launched (last year) the first bank-owned digital currency exchange in Japan, has invested $15 million in Tangem, a Switzerland-based developer of “smart physical banknotes” for cryptocurrencies.

"Smart Physical Banknotes"

As explained on Tangem’s official website, the company has designed proprietary slimline hardware wallets for digital assets - which it refers to as “smart banknotes.” In addition to providing a cold storage solution for cryptoassets, Tangem’s banknotes may be used like a bank-issued debit card. The product’s users may settle transactions off-chain after depositing cryptocurrency onto the device through an NFC-enabled mobile phone.

On Monday (January 21st), Tanzem’s management team announced that it would be working with the SBI Group to introduce other financial products including stablecoins, digital identity solutions, and platforms for conducting tokenized asset offerings, and initial coin offerings (ICOs).

Investing In Tangem Because It Provides "Robust" & "Inexpensive" Hardware Wallet

Confirming the partnership in a separate announcement, the SBI Group said the initiative was being financed and managed through the firm’s SBI Crypto Investment division. SBI Group’s management explained they had invested in Tangem because it offered a “robust” crypto wallet product which was also “inexpensive.”

Commenting on the collaborative effort, Yoshitaka Kitao, the president and CEO of SBI Holdings, remarked:

The Tangem hardware wallet, which is highly secure and affordable, is an important tool to promote mass adoption of digital assets and blockchain. We believe utilizing Tangem will help stimulate the demand for other blockchain services provided by SBI.

On October 22nd, 2018, the SBI Group announced its partnership with Sepior, which also involves the development of a digital asset wallet for SBI Holdings’ digital currency exchange, VCTRADE. In March of last year, the SBI Group had acquired a 40% stake in Taiwan-based cold storage wallet manufacturer, CoolBitX.

Huge Losses Due To Cryptocurrency Hacks

During the first half of 2018, Japanese investors reportedly lost over $500 million due to hacks of various local digital currency exchanges. This, according to the country’s National Police Agency (NPA) which may not have accounted for the Coincheck hack in late January 2018. Notably, the security breach involving Coincheck last year had resulted in the loss of over $534 million worth of NEM (XEM) tokens.

Due to the relatively high risk of keeping digital currencies on centralized exchanges that usually have access to users’ private keys, an increasing number of crypto investors have started using hardware wallets to store their digital assets.

As CryptoGlobe reported in October 2018, Eric Larcheveque, the CEO of Ledger, a leading crypto hardware wallet provider, had said that every investor must store their cryptoassets on a hardware wallet. He also wrote in a blog post:

When you own cryptocurrencies, what you really own is a 'private key', a critical piece of information used to authorize outgoing transactions on the blockchain network. Whoever has the knowledge of this key can spend the associated funds. Hence the famous expression 'not your (private) keys, not your bitcoins'.

CoinBits Allows Users to Earn Passively By Converting, Saving Change in Bitcoin

Erik Finman, an early Bitcoin (BTC) adopter, has launched a crypto platform called CoinBits, which allows investors to passively invest in the flaghship cryptocurrency.

According to TechCrunch, Finman’s new app, CoinBits, intends to democratize access to cryptocurrency by allowing people from all walks of life to make small investments through commonly-used investment and savings strategies. These reportedly include roundups on transactions made via credit or debit card purchases.

The CoinBits app will also support conversion of fiat currency to bitcoin via regular transactions from users’ checking or savings accounts. While CoinBits has been designed to mainly benefit its users, Finman revealed that his own BTC holdings will also grow as more people use the small savings app.

No Commissions on Transactions, 98% of Bitcoins Stored Offline

As explained on CoinBits’ official website, users can invest small amounts such as $10, $25, $50, or $100 through the app’s web-based interface. The savings app also lets users adjust the risk level for their investments.

Notably, the CoinBits app does not charge transaction fees and 98% of users’ bitcoins are kept securely in cold storage (offline).

Explaining how investing in cryptocurrencies can be challenging for some people, due to their highly technical nature, Finman said:

Overall, investing in bitcoin is complicated and can feel almost impossible. CoinBits allows you to put that spare change in bitcoin. For example, if you spend $1.75 on French fries, that remaining 25 cents is invested automatically.

As noted on CoinBits’ website, the company handles withdrawals and users are charged a $0.50 fee for same-day processing. There’s also an option to download the transaction history associated with users’ accounts. This makes it easier for users to manage their finances and track how much they may have gained or lost on their bitcoin investments.

Crypto-Backed Lender Receives $25 Million in Deposits Two Weeks After Launch

As the crypto and blockchain ecosystem continues to evolve, many new startups have been offering different products and services which allow users to earn passively on their digital asset holdings. In March 2019, BlockFi Lending LLC, a New York-based “secure non-bank lender” announced it had received $25 million in cryptocurrency deposits just two weeks after launching its crypto-backed loans packages.

BlockFi’s investment packages allow users to earn interest on their Bitcoin (BTC) and Ether (ETH) investments.