Japanese financial giant Mitsubishi UFJ Financial Group (MUFG) joined hands with 21 other firms to set up a blockchain consortium for research and development of standards for security token management.
Dubbed Security Token Research Consortium, the participants in the consortium include KDDI Corp., NTT Docomo Inc., Japan Securities Finance Co., Ltd., KPMG, and Accenture.
Established on November 6, the group of companies will offer infrastructure to enable “seamless automatic securities settlement and fund settlement, as well as the protection of investors’ rights, based on blockchain technology.”
Bringing blockchain-based services in the industry
The consortium will also share knowledge and research on various perspectives of the financial sector using blockchain. It is also planning to combine security token and smart contracts technology and will also collaborate with “external programmable money.”
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“Additionally, we will construct a structure that protects investors’ rights by combining blockchain infrastructure with a trust function to minimize counterparty risk, which is currently an issue for fundraising through tokenization,” MUFC stated in the announcement.
It detailed that the blockchain-based service will update the information with each impression of the transfer of rights.
“Information about each security will be programmed at the time of issue and fund transfers associated with interest payments and redemption will be implemented automatically. Through the exchange of tokens on different blockchains without third party mediation, the Service aims to settle funds automatically and simultaneously upon the transfer of rights to securities,” the announcement added.
According to Coindesk, the consortium has appointed a digital securities management firm Securitize as its sole issuance platform provider.
Meanwhile, other major Japanese companies are also taking an interest in the security token industry. Last month, six Japanese financial giants, including Monex Group, Daiwa Securities Group, and SBI Securities teamed up to form a self-regulatory body for security token offerings (STO).