It is hereby announced that Japan Securities Clearing Corporation, in cooperation with stakeholders, will implement blockchain technology in settlement by delivery of gum futures as described below from January 2023 as its first attempt at its use of blockchain technology.
press release
– Leveraging CCP’s blockchain technology – implementation for settlement of rubber futures by delivery as a first attempt – https://t.co/5ww9jce8kG
— Japan Exchange Group EN (@JPX_official_EN) January 30, 2023
Theme
Settlement by delivery of Rubber (RSS3) Futures* on the Osaka Exchange, Inc.
* Futures contracts on Ribbed Smoked Sheet (RSS) #3, which is the standard natural rubber graded by international organizations or producing country authorities
Usage Details
Currently, a delivery settlement of gum futures is done through the exchange of a document called a “Delivery Order” which allows its holder to receive a delivery of gum. In the future, the delivery method will migrate to an online exchange of a token that records the delivery order information using blockchain technology.
Reference: Delivery Records by Commodity Derivative Products (Average per Settlement Day, in millions of yen)
Start time/number of users
From Delivery for Contract Month Contracts Jan 2023 (Date of Settlement by Delivery: 31 January 2023 (Tuesday))
A total of 13 firms consisting of selling/buying clearing participants and customers in the settlement by delivery of rubber and warehouses that hold the rubber to be delivered
expected effect
Thereby, the delivery order process such as preparation and delivery, which has been performed between seller/buyer/warehouse at each time of delivery settlement of rubber, is eliminated, and delivery settlement is completed online, and thus efficiency of delivery settlement is improved.
future perspective
Extension to precious metals
Settlement by delivery of precious metals such as gold, silver and platinum, which are more liquid than rubber, is currently done through an exchange of securities known as “warehouse receipts”.
Unlike delivery notes, warehouse receipts are securities that can also be used as collateral for various transactions. Its digitization is to be discussed in future in the Legislative Council of the Ministry of Justice. Therefore, we will keep an eye on the status of such discussions and, in the next step, examine the feasibility of their digitization.
Further increase processing efficiency and strengthen responsiveness for the future
The digitization of assets using blockchain technology has already been realized in small-volume securities such as less liquid real estate or bonds.
Japan Securities Clearing Corporation decided to use blockchain technology this time as a first attempt in trading Japanese listed products. It seeks to increase settlement efficiency through the implementation of new technologies, as well as to strengthen its future responsiveness to a possible expansion of the use of new technologies such as this in the trading and clearing/settlement of more liquid listings on products and OTC products.
Source: Japan Securities Clearing Corporation
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