Financial services titan SBI Holdings is spinning out a new company arm for cryptocurrency mining ventures in a new sign the Japanese company remains as committed as ever to facilitating the future of the cryptoeconomy.
The subsidiary, SBI Mining Chip Co., will be responsible for the “manufacturing of mining chips and development of mining systems” — a reality that will see yet another major chip manufacturer enter the cryptocurrency game.
As part of their mining pivot, SBI said they were teaming up with an unnamed American semiconducter producer to create a new line of mining chips:
“To lead the business, Adam Traidman, an expert with a high level of expertise in the field of leading-edge semiconductors and other electronics, has been appointed to represent SBIMC. The development and manufacturing will be conducted together with a relationship between a large semiconductor enterprise in the U.S.”
The shift is far from the first time SBI has looked to take a deeper dive into the crypto space. The exchange opened up a bitcoin cash (BCH) mining pool in the spring of last year, though the endeavor has since fizzled out. In a similar vein, company subsidiary SBI Virtual Currencies launched a cryptocurrency exchange, Vctrade, last summer.
SBI Big on Ripple (XRP)
The SBI brand has been one of the biggest backers of the Ripple and XRP ecosystem in recent times.
Upon the launch of Vctrade, the leadership of SBI Virtual Currencies said that XRP was a prime focus for the upstart exchange:]
“[Regarding] the virtual currencies handled, first of all, we deal with XRP, [and] sequentially, bitcoin (BTC), [then] bitcoin cash (BCH).”
SBI Holdings president Yoshitaka Kitao also projected last month that the market capitalization of XRP will transcend the market cap of bitcoin (BTC) at some point in the future:
“Because XRP is already beginning to become international, xRapid will be used for fund transfers in 2019. By increasing the so-called XRP’s plastic use, we anticipate that the XRP market capitalization will easily exceed the market capitalization of Bitcoin (BTC).”
However, since the market cap of bitcoin has never been flipped by another coin yet in its first 10 years in existence, it seems highly unlikely for now that XRP could come anywhere close to surpassing BTC’s capitalization in 2019. Such a reality is not out of the realm of possibility, though it is extremely unlikely in light of the current state of the cryptoeconomy.
Bitcoin remains king, as it were.
SBI Looks to Smart Crypto Cards
Earlier in 2019, SBI Holdings invested $15 million (USD) into Tangem, a Swiss startup focused on making cryptocurrency smart cards, i.e. crypto-based debit cards.
Tangem builds de facto hardware wallets in the form of debit cards that users can leverage for pre-denominated off-chain transactions.
At the time, the Japanese company said that investing in Tangem could spur interest in SBI’s “other blockchain services.”
Tangem launched its first blockchain pilot in Singapore, where the company released 0.05 and 0.01 BTC banknotes in Singapore in 2017. Whether the smart crypto card tech will take off remains to be seen, but what is clear is that SBI has found the arena worth serious consideration.
A Saturated Field of Competition
When it comes to the miner manufacturing industry, SBI is joining a crowded field full of the likes of Bitmain, Canaan, and Innosilicon, all of which produce their own mining hardware.
Only time will tell if SBI can make serious inroads against these competitors, but SBI’s domestic position in Japan will ensure in the least that the company has the potential to become a prominent mining company in the Asian island nation.
However, it’s safe to assume SBI has bigger plans than just Japanese operations going forward.
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