Osaka Digital Exchange (ODX) to Start Trading of Digital Security Tokens in Japan

Osaka Digital Exchange (ODX) to Start Trading of Digital Security Tokens in Japan

Osaka Digital Exchange (ODX) is set to transform the Japanese financial landscape with the launch of the country’s first-ever securities trading platform. The announcement, made on November 20, revealed that the company will commence trading of security tokens on its proprietary platform, dubbed “START,” on December 25, Christmas day.

Having secured regulatory approval from Japan’s financial watchdog on November 16, ODX is now authorized to operate the Securities Token Proprietary Trading System (ST PTS) in compliance with local securities laws.

Ichigo Owners Leads Tokenized Securities Issuance

The company, launched in 2021, consists of prominent key players from Japan’s traditional finance sector, including SBI Holdings and Sumitomo Mitsui Financial Group (SMFG). With the primary objective of establishing a digital stock market, the forthcoming launch of the digital securities platform marks a significant step toward achieving this goal, providing investors with alternative investment opportunities.

In a separate press release by SBI Holdings on Monday, the security tokens that would be traded on the START platform starting next month will be issued by real estate company Ichigo Owners. The firm plans to issue tokenized securities named  “Ichigo Residence Token – Shiba Koen, Higashi-Shinjuku, Metropolitan University, Monzennakacho, Takaido, Shinkoiwa as its third public offering worth approximately 3 billion yen ($20 million).

The token is backed by investments in six highly convenient rental residential properties with excellent access to the city center and is expected to be the largest issue price ever for Ichigo Group security tokens.

Progmat to Facilitate the Token Issuance

ODX said the token issuance will take place on Progmat, a robust software platform dedicated to the issuance and management of digital assets.

The upcoming launch of the ODX securities trading platform aligns with a broader trend in Japan, where the demand among individual investors for alternative assets is growing. Although the digital securities market is still in its infancy, market observers expect Ichigo’s issuance to serve as a litmus test for market demand.

Market observers said that the moderate size of this inaugural sale suggests a cautious exploration of market demand. However, it is part of a broader initiative in Japan to cultivate digital securities, directing individual funds towards investments that carry more risk but promise higher returns. According to Bank of Japan data, Japanese households currently hold over 2,000 trillion yen ($13 trillion) in financial assets, with over half parked in near-zero interest bank deposits.

Simultaneously, other key Asian financial hubs, including Hong Kong and South Korea, have recently eased regulations, opening the door for increased digital securities issuances and trading. This collective regulatory shift sets the stage for the expansion of this emerging asset class.

Osaka Digital Exchange (ODX) to Start Trading of Digital Security Tokens in Japan