Last week the Japan Exchange Group (JPX), the operator of the Tokyo Stock Exchange, outlined its medium term strategy and stated it would launch a digital securities market by April 2025. In Japan, digital securities refer to blockchain-based security tokens.
However, its been widely publicized that SBI’s Osaka Digital Exchange plans to launch a tokenized stock exchange by 2023. “I’m not trying to compete,” said Akira Kiyota, CEO of JPX, the Nikkei reported.
However, before 2025, JPX aims to launch new services using digital technologies and is targeting three examples in the next three years, although these may not be blockchain-related.
Previously the TSE was involved in a blockchain pilot for post-trade. One example could be blockchain-based green bonds after the JPX revealed that it was researching the topic in February. However, there’s a possibility that it might launch the initiative earlier, given it has plans to offer ESG bonds by April 2023, although they need not use blockchain technology.
That was just one of several announcements in the run up to sharing this plan. Today sees the launch of its new subsidiary, JPX Market Innovation & Research (JPXI), which will focus on data and index services but will also include blockchain and distributed ledger technology (DLT). Since the November announcement about JPXI it clarified that data and digital businesses of the Tokyo Stock exchange and Osaka Exchange have been transferred into the new company.
In a desire to make speedy progress, we can perhaps expect to see additional acquisitions by JPX. That follows the February announcement that it bought a 23.7% stake in Digital Asset Markets(DAM), the Japanese crypto-asset exchange. DAM is currently the sole sales outlet for Zipangcoin, a gold-backed digital asset issued by Mitsui & Co Digital Commodities.
Numerous stock exchanges and clearing houses worldwide are planning to deploy blockchain. The ASX recently announced that the planned launch of its blockchain post-trade platform CHESS might be delayed. It’s not the only one exploring blockchain for post-trade, with others including the DTCC and Deutsche Börse. In Switzerland, the regulated SIX Digital Exchange (SDX) is now live.