SBI, SMGF to Launch Digital Securities Exchange

Japanese financial group SBI Holdings and Sumitomo Mitsui Financial group will be launching a digitized stock exchange in the spring of 2022.

According to a 28 January report from Nikkei, the exchange will launch in Osaka to compete against the Tokyo Stock Exchange (TSE). The companies aim to make the digital securities exchange more attractive to investors by taking orders outside of TSE’s trading hours and reducing the tick size. Investors have reportedly been dissatisfied with TSE since last fall when the exchange suffered a “computer glitch” that halted trading for an entire day.

The joint venture will be the first Japanese exchange to use blockchain technology to handle digital securities. In March, the companies will set up an operator, the Osaka Digital Exchange, to prepare for the launch of the new exchange. SBI Holdings will own 60 percent of the trading platform, while SMGF will own 40. To prevent any conflict of interest, the companies will set up a governance structure for the platform.

SBI wants the exchange to become a marketplace for nontraditional assets such as real estate, art, and movie distribution rights. The exchange is expected to start handling digital securities in 2023.