<p>Osaka Digital Exchange (ODX) is set to commence security token trading with Ichigo’s real estate assets, marking yet another milestone in Japan’s evolving digital asset landscape.</p><h2 id="header-0">December 25 ‘START’</h2><p>ODX’s Proprietary Trading System (PTS), named “START,” is scheduled to commence operations on Dec. 25, as announced in <a href="https://www.odx.co.jp/en/news/article/dd45st6kma/" rel="noopener noreferrer nofollow">a Nov. 20 statement</a>. This development follows the approval from Japan’s Financial Service Agency (FSA) on Nov. 16 for ODX’s securities token proprietary trading system.</p><p>A security token, essentially a digitized version of traditional securities, represents fractional ownership in real-world assets like equity, real estate, or company shares. ODX’s trading system aims to enhance liquidity and funding opportunities for securities token operations within the region, aligning with its broader vision of establishing a digital stock exchange to rival the Tokyo Stock Exchange.</p><p>Established in 2021 by SBI Holdings and Sumitomo Mitsui Financial Group (SMFG), ODX is poised to welcome Ichigo as its inaugural client on the START platform. Ichigo is a Japanese sustainable infrastructure firm based in Tokyo. Real estate is one of the sectors it is involved in, where it specializes in the renovation and improvement of existing buildings.</p><h2 id="header-1">Third security token launch</h2><p>The real estate company has previously issued two security tokens and now <a href="https://www.ichigo.gr.jp/news/p_news_file/file/20231120_Ichigo_Residence_Token_ENG.pdf" rel="noopener noreferrer nofollow">plans</a> to issue a new token, facilitating real estate investment opportunities for individuals. A company statement reveals that the new security token will invest in six strategically located rental residential properties with superior access to the city center. Bloomberg <a href="https://www.bloomberg.com/news/articles/2023-11-20/japan-s-first-digital-securities-trading-to-begin-on-dec-25?utm_source&#61;twitter&amp;utm_campaign&#61;socialflow-organic&amp;utm_medium&#61;social&amp;utm_content&#61;crypto&amp;leadSource&#61;uverify&#43;wall" rel="noopener noreferrer nofollow">reported</a> on Monday that Ichigo intends to sell approximately $20 million worth of securities backed by property investments, with trading set to commence on Dec. 25.</p><p>The release of real estate-backed security assets will take place on <a href="https://medium.com/&#64;coinness.gl/japans-biggest-bank-explores-global-stablecoin-issuance-d7786cbee60e" rel="noopener noreferrer nofollow">Progmat</a>, a Japan-regulated digital asset platform established in 2022 by Mitsubishi UFJ Financial Group (MUFG) in collaboration with other Japanese banks. Progmat integrates blockchain technology with financial expertise to manage digital assets within the regulatory framework of Japan.</p><p>As a consequence, MUFG will effectively be acting as custodian and security token issuer as part of this security token offering. SBI Securities will act as the lead underwriter of the project.</p><p>Security tokens, subject to federal regulations, derive their value from external tradable assets and represent ownership in an enterprise or asset. The introduction of security token trading on ODX has the potential to enhance liquidity and streamline the investment process for individuals. However, with the initial offering of $20 million in securities, it is evident that Japan is cautiously exploring the demand for alternative forms of securities.</p><h2 id="header-2">SBI portfolio company</h2><p>Initially, Japanese financial services conglomerate SBI Holdings had a <a href="https://www.nomuraholdings.com/news/nr/holdings/20220606/20220606.pdf" rel="noopener noreferrer nofollow">70% stake</a> in ODX, with SMFG holding a 20% equity stake. Investment Bank Daiwa Securities and global financial services group Nomura made up the balance, with each having a 5% equity holding in the business.</p><p>Those equity stakes have most likely been diluted as in September ODX<a href="https://www.marketsmedia.com/cboe-virtu-optiver-invest-in-osaka-digital-exchange/" rel="noopener noreferrer nofollow"> confirmed</a> that it had accepted equity participation from the Chicago Board Options Exchange (CBOE), the largest U.S. options exchange platform, private equity firm Virtu Investments and proprietary trading firm and global market maker Optiver Principal Strategic Investments (PSI).</p>

Japan’s ODX to commence digital securities trading in December

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