Japanese Stock Exchange JPX Invests in Digital Asset Markets, Gold Token Vendor Mitsui – Ledger Insights
Today, the Japan Exchange Group (JPX) announced that it has invested 360 million yen ($3 million) in Digital Asset Markets (DAMS), giving it a 23.7% stake. The startup has been registered as a crypto-asset exchange in Japan for a year. It is currently the only outlet for Zipangcoin, a gold-backed digital asset issued by Mitsui & Co Digital Commodities that launched earlier this month.
The founder and major shareholder of DAMS is Intertrade, which provides trading systems for JPX’s Tokyo Stock Exchange. Mitsui & Co is also an investor in DAMS.
The founders of Intertrade previously stated, “Notwithstanding the pros and cons of virtual currencies, INTERTRADE believes that blockchain technology will change the way the world works just as the internet has, and a new era is approaching when we will see a steady stream of new services being launched based on blockchain technology. She therefore decided to be at the forefront of this movement by creating DAMS.
Although DAMS is initially the sole selling point of Zipangcoin, Mitsui & Co plans to expand token sales to other cryptocurrency exchanges, although we believe DAMS is the primary partner. We already wrote about Zipangcoin earlier this month.
The purpose of Zipangcoin is to provide an inflation hedge that consumers can use without the need for a large investment. However, it is also intended to be used as a means of payment.
Mitsui & Co aims to issue 2 billion yen ($17 million) of tokens in the first year and 12 billion yen ($104 million) over three years, with a maximum issuance of $337 million.
The symbolic price is approximately tied to the price of physical gold on the London Metal Exchange (plus fees), and Mitsui will purchase the equivalent physical gold. One Zipangcoin (ZPG) is equivalent to one gram of gold. Initially, the token is not exchangeable for physical gold, but there are plans to do so in the future. We imagine that a token holder might need a significant amount of gold for redemption. Otherwise, it could be quite costly for Mitsui to ship a bunch of gold coins.
If DAMS or Mitsui & Co Digital Commodities goes bankrupt, various safeguards are in place. For example, if Mitsui & Co Digital Commodities fails, this would trigger the payment of a bank guarantee to DAMS in a trust account for coin holders.
Coins are issued on BitFlyer’s “miyabi” enterprise blockchain.
Last week, JPX said it was exploring blockchain for green bonds.
Meanwhile, this week, other exchanges also announced digital asset activities. The London Stock Exchange Group has acquired trading technology provider TORA, citing one of the motivations as TORA’s ability to provide access to digital assets as well as conventional asset classes. And ICE, the parent company of the NYSE, has invested in security token startup tZERO.