SBI Holdings, the investment arm of Japanese financial giant SBI Group, has cancelled a business partnership with China’s Huobi Group involving the launch of two cryptocurrency exchanges in Japan, Coindesk has reported.
Last December, the two companies signed an agreement to collaborate on the launch of Huobi Japan and SBI Virtual Currency exchanges. Both ventures were expected to go live this month, but these plans have now been scrapped, as SBI Holdings has decided to explore a different approach.
The Japanese firm announced on Friday that it no longer planned to use Huobi’s technology and expertise in running cryptocurrency exchanges, and instead had decided to develop the SBI Virtual Currency project in-house. The company explained that it needed a system that incorporates higher levels of security and which can respond promptly to domestic and overseas regulations. SBI Holdings hope to build such a system by utilising SBI Group’s own resources.
The decision comes as regulators in Japan are starting increase pressure on the local cryptocurrency sector. The country’s financial watchdog, the Financial Services Agency, last week unveiled a wave of punitive measures, aimed at several digital currency exchanges deemed to have insufficient security. These measures included temporary suspensions for two trading platforms.
It is unclear how SBI’s decision would impact Huobi’s planned expansion in Japan. Expansion to overseas markets is important part of Huobi’s strategy to grow its business in the wake of China’s ban on domestic cryptocurrency trading.