JSCC Hyperledger Financial Services Workshop
- Peter Johnson
- Dec 11, 2023
- 3 min read
At the Tokyo Stock Exchange, the Japan Securities Clearing Corporation organized a “Hyperledger Financial Services Workshop” during the Open Source Summit initiated by the Linux Foundation.
Takeshi Hirano, Senior Executive Officer, opened the event with a warm welcome, creating the perfect atmosphere for a day of dialogue and discussion. To honor the spirit of his remarks, this post summarizes the content while providing links to recordings of three of the keynote speeches at the end.
JSCC is a branch of Japan Exchange Group, and it takes charge of the post-trade processing business of trades done on the exchange, in addition to certain off-exchange trades.
JSCC ensures that all transactions are securely settled as a central counterparty, with a large number of transactions cleared daily, as seen in the data above.
In order to reduce the associated risks resulting from such an excessive position and ensure the proper execution of all operations, we are as thorough as possible with our daily activities.
Nevertheless, we have been having difficulty keeping up with the most recent trends and technologies which might be beneficial for financial services.
JSCC initiated research and development of distributed ledger technology (DLT), or blockchain, in 2018.
At the outset, we spoke about a data platform for the entire industry that utilized DLT; however, as we saw rising enthusiasm for asset tokenization in 2020, we incorporated a study on the potential of token use into our investigations.
In January of this year, the initial Distributed Ledger Technology (DLT) system was initiated.
This system tokenizes warehouse certificates or other futures delivery settlements at the Tokyo Commodities Exchange (TOCOM), which was previously a manual operation by people.
JSCC's business might be perceived as quite marginal, however the crucial point is that, by utilizing the current DLT which is standard around the world, our scalability for the future and our ability to take on trends which are currently hard to anticipate have been markedly improved.
One could argue that the implementation of this proof of concept has been an impressive achievement.
Though the Japan Securities Clearing Corporation (JSCC) will not necessarily become the issuer of tokens, it has already established itself as a central counterparty for various financial transactions that are denominated in Japanese yen.
Consequently, JSCC would certainly be the top consumer of asset tokens should they get to be the norm in international dealings in the years to come.
Accurately understanding the pros and cons of DLT is critical for JSSC to ensure its use is directed in the right way.
Furthermore, more than half of JSCC's clearing activity is generated by foreign investors.
It is imperative that we agree on standardized, unified approaches worldwide through a comprehensive discussion.
Lately, there has been more attention paid to digital currencies and asset tokens from central banks across nations and depositories the likes of the DTCC.
Engagement in communication with the international community takes on an added importance to prevent Japan from becoming secluded and secure compliance with international standards.
In light of current conditions, JSCC decided to join the Hyperledger Foundation this October, with the goal of constructing a DLT system using open source technologies.
This initiative includes representatives from the Hypeledger Foundation and IBM, who have been participating in DLT research with us over a lengthy period of time, having been invited to today's event.
This presentation is mainly in English, with a summary of its content translated into Japanese.
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