[DigitalToday reporter Jinju Hong (홍진주)] SBI Securities and Daiwa Securities have begun building a trading system to enable overseas investors to invest in Japanese digital securities. The two companies are reviewing the start of external trading in digital securities as early as 2027.

On July 8 local time, blockchain media outlet CoinPost reported that the key is to expand a digital securities market in Japan that has largely been open only to domestic residents to overseas investors. The two companies are setting up a structure that allows investment in Japanese assets from abroad through blockchain-based digital securities. The Nikkei reported on July 7 that they worked with fintech firm Boostry, backed by SBI Holdings and Nomura Holdings, to validate a direct trading base with Singapore.

In the process, they received approval from self-regulatory bodies such as the Japan Securities Dealers Association and moved into a practical stage. The trading structure links to a public chain and connects directly with overseas. Digital securities distributed in Japan have effectively been centered on domestic investors, but this time the framework is designed to enable trading with Singapore after legal and tax arrangements.

Overseas investors will use a structure in which they can invest in Japanese digital securities by opening accounts at Singapore investment outlets of SBI Holdings or Daiwa Securities Group. The investment targets are not limited to simple bond-type products. On the Japanese side, they are also considering private debt, real estate, content such as animation, and alcoholic beverages as investment targets.

They are reviewing the use of a dollar-based stablecoin issued by U.S. firm Circle as a settlement method. They are also keeping in mind the future introduction of a yen-based stablecoin. That means they are also discussing a way to link stablecoins to improve settlement efficiency in cross-border transactions.

The initiative could expand not only into inflows of overseas funds into Japanese assets but also into Japanese investors’ investment in overseas digital securities. SBI Securities and Daiwa Securities are also reviewing a structure that would allow their customers to invest in Singapore digital securities over the longer term. It is an approach that keeps a two-way market open.

The target countries may not stop with Singapore. The two companies plan to additionally verify the possibility of trading with other countries beyond Singapore. As a result, Japan’s digital securities market has entered a phase of seeking a shift from a domestic distribution-centered structure to an overseas-linked market.

The key points to watch in the plan are the actual start date for trading and whether the settlement method is finalized. If the review of a 2027 start becomes reality, Japanese digital securities could move into full-scale cross-border trading by combining a public chain, stablecoins and an overseas account system. The trend of Japan’s securities industry moving to promote investment in Japan through digital securities is also expected to become clearer.