Seven Japanese corporations to create new company for digital securities: reports

(Image source: Shutterstock)

Seven Japanese corporations, including Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui Trust Bank, and Mizuho Trust and Banking, are in the process of jointly establishing a new company to issue digital securities, according to local media reports. 

The other four companies involved include Japan Exchange Group (JPX), NTT Data, Sumitomo Mitsui Financial Group, and SBI PTS Holdings, a subsidiary of SBIHD, which plans to launch a digital securities exchange in 2023,  the Nikkei newspaper and other Japanese media reported on December 16. 

The seven institutions will share one technological platform to reduce costs and use the new company’s technology to develop their own products, such as “utility tokens” to digitize membership cards with shareholder benefits and privileges and the issuance of cryptographic assets.

Digital securities are securities issued using blockchain technology. Since the Financial Instruments and Exchange Law was revised to permit the products in spring 2020, they have been attracting attention as a new investment asset. Commercial real estate, corporate bonds, etc. can be issued as small tokens, allowing investment from small amounts.

The amount of each company’s investment in the new company will be determined as soon as the calculation of corporate value is completed, according to the media reports. Mitsubishi UFJ Trust will limit its stake to 49 per cent or less. The  new company is scheduled to start operating in January 2024.

Mitsubishi UFJ Trust is already using Progmat for digital securitization of real estate and services. In February, the company announced the launch of “Progmat UT”, a utility token (UT) that can be issued using NFT technology for shareholder benefits, usage rights for specific assets and services, membership rights, etc. 

The company announced the development of a wallet service for various digital assets, along with the Progmat UT mechanism. The company also plans to issue “Progmacoin,” a stable coin that can be used for immediate settlement of digital securities, in spring 2023.