Mitsubishi UFJ Financial Group – the largest financial group in Japan and the fifth largest bank in the world in terms of assets – is leading a 22-member research consortium to develop standards for managing security tokens.
The group – the Security Token Research Consortium – includes securities issuers, investment dealers and technology companies, such as NTT Docomo Inc. and KDDI Corp., the two largest telecommunications companies in Japan.
Securitize, a company that allows the issuance and management of digital securities, will be the only company to issue security chips for the platform. The consortium will be the company's first opportunity to identify fixed income assets, including bonds, when CEO Carlos Domingo told CoinDesk that CoinDesk is one of the best opportunities for realizing fixed income assets. efficiency gains.
The consortium is looking for ways to develop, offer and integrate financial transaction services through the blockchain, with an emphasis on the automatic settlement of securities and funds. It plans to develop a dedicated chain of security chip blocks, called "Progmat", which will provide a securitized asset management platform, including trusted functions, to minimize counterparty risk.
As part of the ongoing research, the consortium will also file a Japanese patent application for the infrastructure and organizational structure to manage security tokens.
The consortium is being formed as a result of Japanese lawmakers amending the country's cryptography laws. In March, the Japanese legislature, the Sejm, introduced a new bill defining security tokens as liquid securities, which would amend the Fund Settlement Act and the Financial Instruments and Foreign Exchange Act.
"It has to go through the loopholes of the middlemen – the issuer, the paying agent, the clearing house – to be able to actually repay to the investor any part of the note that 39 he acquires, "said Domingo about the current way in which fixed income assets are issued and purchased. "This process is bound to have errors."
Earlier this year, Securitize launched its digital security offering service and a reference network to help businesses emit and manage digital values. The company raised $ 14 million in Series A supported by MUFG Innovation Partners, Nomura Holdings and Santander InnoVentures.
MUFG has several other blockchain projects in its innovation pipeline.
The Japanese financial services giant is setting up a blockchain payment network with the financial technology company Alkami Technologies, which is expected to be launched in the first half of 2020. Its blockchain trading platform with NTT Data, designed to promote exchanges between Singapore and Japan, is being tested. also participated in a bulk concept demonstration to streamline customer knowledge processes with HSBC Singapore, OCBC Bank and Info Communications Media Development Authority, a Singapore regulator.
MUFG image via Shutterstock