Japanese exchange plans to start digital securities trading on Dec. 25

Proprietary trading system operator Osaka Digital Exchange (ODX) is set to kickstart the trading of digital securities in Japan through security tokens issued by two real-estate firms to fill the demand for alternative assets. 

In an announcement, ODX said that its trading system for security tokens commences on Dec. 25. Ichigo, a Tokyo-based company, is reportedly planning to sell over $20 million in securities backed by property investments. Apart from Ichigo, Kenedix is also planning to offer digital securities within the ODX platform.

Security tokens are digital assets that usually represent a stake in an external enterprise or asset. A digital token is categorized as a security token when it’s subjected to regulations under federal law, and its value is derived from external tradable assets. 

Starting the trading of security tokens on an exchange could increase its liquidity and make it easier for individuals to invest. However, while the new developments show that Japan is warming up to the idea of trading digitally managed securities, the number of securities offered being only $20 million shows that the market is still testing the waters and is weighing up whether there will be a demand for such alternative forms of securities.

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Digital asset adoption in Japan has seen several significant developments in the past few months. On Sept. 15, a Japanese financial news site reported that the Japanese government plans to allow startups to raise funds by issuing cryptocurrencies instead of stocks. On Oct. 12, electronic payments company DeCurrent Holdings revealed a white paper on a stablecoin project backed by the Japanese yen. According to the firm, the coin will be launched in 2024.

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