Mitsubishi UFJ Financial Group

Security Token Research by a Japanese Firm

Japanese group namely the Security Token Research Consortium, which is along with security issuers, broker dealers, and technology companies such as NTT Docomo Inc. and KDDI Corp., is developing standards around security token management.

Mitsubishi UFJ Financial Group, having 22 members in their Research Consortium, is a Japanese bank holding and financial services company holding assets of around US$2,459 billion as of 2016. They think for creating efficiencies, tokenization will play a vital role. And throughout the consortium they will tokenize fixed income assets including bonds. Their platform service will be issued by Securitize, which will help enabling the issuance and management digital securities.

The consortium, which is trying to have Japanese patent to develop organizational infrastructure for managing security tokens, is developing own platform, namely Progmat, through which they will offer financial transactions services and handle securitized assets incorporating trust functions, which will minimize counterparty risk indeed.

The consortium has taken the initiative in such a time when the law of Japanese just recently had a change that tells security tokens as liquid securities. The change of law really brought about a positive response to the emerging crypto space and it will enhance the process of settlement of process and usage of Financial instruments. But even after the amendment of laws, they will face some issues with intermediaries like the issuer, the clearing house and the paying agent.

The present way of fixing income assets is prone to error. For being official record keeper of securities issued on blockchain, Securitize launched a security offering service and a referral network, having an intention to assist companies issue and manage digital securities. To act as an official record keeper the company had their registration from the SEC. The company along with fintech Company Alkami is developing a blockchain payment network, expected to be launched in 2020, and its blockchain trade platform having NTT data aimed at maintaining trade between Singapore and Japan.

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