Japan-based firm Securitize Japan initiates digital securities platform in partnership with NTT Data
Securitize and NTT Data have been working together for the past 4.5 years, and their collaboration is set to take a new direction. The next phase of their partnership involves the issuance of digital bonds and the tokenization of other financial assets.
NTT Data, Japan's second-largest shareholder in the country's largest digital securities platform, Progmat, holds an 11.7% stake in the company. Progmat, which is Japan's largest digital securities platform, may potentially expand to include the tokenization of various financial assets beyond digital bonds.
The aim of this collaboration is to leverage blockchain technology to facilitate more efficient, transparent, and accessible issuance and management of digital securities, including bonds and potentially other asset classes such as equities and real estate-backed securities.
The digital securities platform is designed to support the digital issuance of bonds by institutional and corporate issuers using tokenization, allowing for fractional ownership and easier transferability. The platform also plans to enhance its capabilities to tokenize a wider range of financial instruments, thereby supporting Japan's broader move toward a digital society and digital finance infrastructure.
The platform envisions engaging banks as bond administrators, issuers, and securities firms. It also aims to enable similar perks for bondholders, such as easier access to information and potentially dividend payments. Moreover, it will allow bond issuers to have a more direct marketing relationship with their investors, a significant shift from the current system where most bonds in Japan are sold via securities firms, and issuers don't have investor contact details.
NTT Data owns Japan Information Processing (JIP), the operator of Japan's largest bond issuance and payment agent solution. The digital securities platform will utilize Securitize's infrastructure, which includes its proven track record in compliant digital securities issuance, as seen in the issuance of BlackRock's BUIDL money market fund in the United States.
MUFG, the founder and largest stakeholder in Progmat, also holds an investment in Securitize. This strategic partnership aligns with NTT Data’s strategic initiatives in digital transformation and Securitize’s global expertise in compliant digital securities issuance.
While the detailed roadmap or timelines for these expansions were not directly provided, this strategic direction is consistent with their known business focus on digital securities innovation and Japan’s regulatory environment encouraging digital asset adoption.
This collaboration between Securitize and NTT Data is expected to play a significant role in supporting bond issuance for companies revitalizing local economies using their digital securities platform. It is also a step towards a more digital and accessible financial system in Japan.
- The tokenization of various financial assets, beyond digital bonds, may be possible with Progmat's potential expansion, thanks to NTT Data's involvement and the collaboration with Securitize.
- Insights from this partnership could help in leveraging technology to issue and manage digital securities, particularly capital investments like bonds, but potentially across multiple asset classes.
- The government's supportive regulatory environment will likely aid in the digitalization of Japan's financial system, accelerated by the work between Securitize and NTT Data, involving asset digitization and the issuance of digital bonds.
