Asia's largest stock exchange operator JPX approves blockchain transactions

Rage Review : It is reported that the Japan Exchange Group, the operator of the Tokyo Stock Exchange, has begun to develop blockchain applications to assist the stock exchange's business operations and improve the efficiency of the trading platform. In addition, the group's enthusiastic interest in blockchain applications has been put into practical use in Myanmar, helping to establish the Myanmar Stock Exchange, assisting it in signing a joint enterprise agreement with the Myanmar Economic Bank, and conducting dialogue with the Myanmar government. At the same time, other international and financial institutions have also made significant efforts in actual testing of blockchain.

Translation: Flora

Japan’s Financial Services Agency has allowed Japan Exchange Group (JPX), the operator of the Tokyo Stock Exchange, to use financial technologies such as blockchain as its core trading infrastructure.

Nikkei commented that Japan's financial regulators will now begin to gradually recognize the adoption of financial technology (Fintech).

The previous regulatory system stipulated that subsidiaries of the Japan Exchange Group could only engage in activities related to securities trading business. The new regulations allow the group to introduce technology to improve the operating efficiency of trading platforms.

Apparently, the Japan Exchange Group has begun developing blockchain applications for stock exchange operations. The group said that as early as February 2016, they began to work with IBM Japan to develop blockchain applications and conduct blockchain experiments. In March, several stock exchanges conducted a proof-of-concept (PoC) test in an artificial sandbox environment to test the role of blockchain in clearing, settlement and other exchange operations. The code used in the test environment came from the Linux Foundation's open source Hyperledger platform.

Passion for blockchain

These tests have been enough to convince the Japan Exchange Group of blockchain technology to form a larger Japan Blockchain Alliance dedicated to developing capital market infrastructure solutions. PoC tests between alliance participants will begin within the alliance in spring 2017. At that time, the Tokyo Stock Exchange (TSE), Osaka Exchange (OSE) and Japan Securities Clearing Corporation (JSCC) will all become founding members of the alliance.

In addition, the Japan Exchange Group’s enthusiastic interest in blockchain applications has already been put into practice in Myanmar, connecting the Yangon Stock Exchange and other local brokerage firms. The Japan Exchange Group helped establish the Myanmar Stock Exchange and assisted it in concluding a joint venture agreement with the Myanmar Economic Bank. In addition, the exchange and the Myanmar government are already in talks to introduce blockchain for securities trading payments.

Following the efforts of Japan's largest securities exchange operator to apply blockchain, other countries and financial institutions have also made significant efforts to actually test this innovative technology. The Australian Stock Exchange (ASX) is perhaps the most notable case, running a blockchain solution in parallel with the existing clearing system with the aim of eventually replacing the latter completely. The Australian Stock Exchange was developed by the US blockchain startup Digital Asset Holdings (DAH), which holds a 5% stake in the company, equivalent to A$1.49 million.

Nasdaq is another exchange operator that has endorsed blockchain trading, launching the Linq trading platform, which allows private companies to trade shares on a distributed ledger.