SBI Holdings and Sumitomo Mitsui Financial Group (SMFG) will launch a blockchain digital securities exchange in Osaka in the spring of 2022 to compete with the Tokyo Stock Exchange.
According to the Nikkei publication, the exchange created by SBI and SMFG will be the first stock exchange in Japan to allow investors to trade digital securities using the blockchain. To prepare for the launch of the exchange in March, the companies will create an operating company Osaka Digital Exchange (ODX). SBI will own 60% of ODX and SMFG will own 40%.
The exchange will use its own trading system and electronic trading platform to enable investors to conduct transactions outside of the regular public exchange. Companies strive to make the exchange more attractive to investors by accepting orders outside Tokyo Stock Exchange business hours and reducing the minimum price step.
The exchange will begin trading digital securities in 2023. SBI believes that digital security technology will make it easier for investors to invest in non-traditional assets such as real estate, as well as art and film distribution rights. The exchange is supposed to become a market for such assets. SMFG brokerage company – SMBC Nikko Securities – will be channeling some of the client’s orders to the new exchange.
Stock exchange operators are increasingly paying attention to blockchain. Back in late 2017, the Australian Stock Exchange (ASX) announced that the blockchain would replace its current Clearing House Electronic Subregister System (CHESS) clearing and settlement system. However, in October, ASX postponed the launch of the system on the blockchain until April 2023 due to higher platform requirements than previously thought.
