SBI Securities and Partners Unveil Results of Cross-Border Blockchain Project for Security Tokens

SBI Securities and Partners Unveil Results of Cross-Border Blockchain Project

Introduction

SBI Securities has taken a significant step forward in the financial landscape by announcing the outcomes of a collaborative project that explores the use of public blockchain technology for cross-border transactions involving security tokens (STs). This noteworthy initiative involved key players in the financial sector, including Daiwa Securities, SBI Digital Markets, Penguin Securities, and BOOSTRY.

Project Background

The domestic market for STs in Japan has been expanding steadily. However, the circulation and selling of these tokens have predominantly remained within the bounds of existing infrastructure and regulations, presenting challenges in terms of accessibility for international investors and the efficiency of cross-border settlements. This project aims to address these issues and broaden access to Japan's diverse assets for overseas investors by employing public blockchain technology specifically for inter-business cross-border transactions.

Key Findings from the Demonstration

The demonstration project relied on the existing consortium-based platform, ibet for Fin, which was developed and operated by BOOSTRY for managing the tokens issued to domestic investors. The project specifically used public blockchain technology to mirror eligible STs during transactions with foreign securities companies and facilitated Delivery versus Payment (DvP) settlements using USDC stablecoin.

This approach confirmed the stability of domestic rights while leveraging the interoperability and global connectivity offered by public blockchain. The project team also identified important practical considerations for financial institutions considering public blockchain usage, including gas fee management, private key management, and compliance with regulation in both Japan and Singapore. Through ongoing discussions with relevant authorities and self-regulatory organizations, the participants engaged in thorough risk assessments concerning the platform's safety.

Notably, SBI Securities and Daiwa Securities reported that, after evaluation and discussions with the self-regulatory body, there were no additional requirements regarding the use of the Ethereum blockchain for this project.

Future Directions

Building on the insights gained from this initiative, the participating companies plan to continue exploring institutional challenges related to bond-type STs and the potential for extending to other asset classes, such as real estate STs. Key themes for ongoing discussions will include the development of operational rules among stakeholders, the management and transfer of rights, as well as the enhancement of practical implementations for stablecoin settlements.

SBI Securities, Daiwa Securities, SBI DM, Penguin Securities, and BOOSTRY are committed to driving the growth of the digital securities market and facilitating connections with the global capital markets through practical and innovative solutions.

Conclusion

For more detailed results of the demonstration project, please refer to the official report.

Additionally, a webinar will be held to elaborate on these results: