SBI Holdings and SMFG to Launch Digital Securities Exchange in Japan 2022

By: Michael Wilson

January 30, 2021 6:08 AM

The two major finance groups have announced plans for an upcoming digital stock exchange that will trade digital securities based on blockchain technology.

SBI Holdings a Japanese finance group is building a digital stocks exchange in collaboration with SMFG - Sumitomo Mitsui Financial Group.

According to a report by Nikkie on Thursday, the new digital securities exchange is expected to be the first Japanese digital stocks trading exchange based on blockchain technology.

It has been reported that both companies are planning to roll out the exchange in spring 2022 but can only begin to handle digital securities a year after 2023.

SBI and SMFG will set up an operator, Osaka Digital Exchange, or ODX. SBI will have a 60% stake in ODX, while SMFG will own 40%, the report states.

The new proposed exchange will use a proprietary trading system, an electronic trading venue run by a securities company to enable trading outside of a traditional public exchange.

The exchange is set to compete with the Tokyo Stock Exchange which is reportedly the third-largest stock exchange in the world today. The new proposed digital stock exchange specifically aims to provide an alternative to the Tokyo Stoke Exchange(TSE) after the exchange suffered a massive outage caused by a system glitch during September 2020.

SBI will face competition from Tokai Tokyo Financial Holdings who announced plans to develop a digital stock exchange with a partnership with blockchain firm Hash Dash.