Japan’s Nomura Forms Blockchain-Focused Partership with Line’s LVC to Develop Blockchain Financial Services

Japan’s Nomura Holdings, a Japanese financial holding company and a principal member of the Nomura Group, in an announcement this month said it has invested in LVC, a subsidiary of Line which is controlled by South Korean internet search engine company Naver Corporation. According to Nomura, the partnership will utilize blockchain technology to develop financial services, and will leverage on Line’s considerable 81 million user base and advanced user experience, along with Nomura’s financial know-how and expertise.

The announcement also mentions LVC’s Bitmax exchange, which recently acquired approval from Japan’s Financial Services Agency (FSA) and started operations in the month of September. LVC oversees Line’s digital assets and blockchain business units, while Bitmax is a cryptocurrency exchange for the Japanese market and is available through the Wallet tab on the Line app.

Both companies announced earlier this year in January 2019 that they were engaged in discussions on the deal with an eye towards March as the target for final agreement. This earlier announcement revealed that LVC’s capital will be increased through a placement of new shares to Nomura.

Terms of the joint venture were not disclosed this time around, though recent announcements suggest that Nomura may have invested as much as 4 billion yen in Line’s LVC, based on information that disclosed that LVC’s capital was listed as 1.21 billion yen as of July 31, 2018, while a more recent announcement stated that the capital has increased to 5.06 billion yen as of October this year.

Nomura has made several other investments in blockchain prior to forming the partnership with Line. In May 2018 it, along with security business Ledger and pioneer investment house Global Advisors, established Komainu, a venture aimed at providing infrastructure and an operational framework for secure and compliant institutional investment in digital assets. In July 2019 it invested in San Francisco-based Quantstamp, a smart contract security company that established Quantstamp Japan GK to assist Japanese enterprises and startups in using secure blockchain technology. It also formed Boostry with Nomura Research Institute in September this year for developing blockchain solutions for trading securities. It is also among six Japanese brokerages to have formed a self-regulatory organization (SRO) for crypto offerings in Japan, the Japan Security Token Offering Association.

Line sees the cryptocurrency industry as one with new user needs waiting to be fulfilled and the potential to provide next-generation technological paradigms. It wants to leverage on blockchain, the backbone of cryptocurrency, seeing as that proof of concepts for it have been developing rapidly in many different areas and demonstrating the technology’s potential to alter future economic systems. For instance in June it partnered with Visa to use blockchain for B2B and cross border payments, and recently it also made investments in blockchain loyalty company Loyyal.

The latest venture between Nomura, Japan’s oldest brokerage, and Line, Japan’s most popular chatting app, will combine their might and expertise together to further transform the field of financial services through blockchain technology. Japan’s financial world is rapidly evolving with blockchain, and Nomura and Line hope to be at the forefront of this change.

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Derek Tan

Derek is the news editor at Absolute Market, a news media focusing on the Southeast Asian tech and startup scene. Contact him at derek [at] absolutemarket.org for any news pitch.