MUFG Seeks Seamless Automatic Securities Settlement via Blockchain

MUFG (Mitsubishi UFJ Financial Group), one of Japan’s biggest banking institutions, has announced the establishment of an ST (Security Token) Research Consortium intended at protecting investors’ rights, as well as offering fund settlement and seamless automatic securities settlement via blockchain. 

Blockchain is touted to be ideal in tackling counterparty risk that is presently a challenge when it comes to fundraising through tokenization. 

MUFG has partnered with 21 other companies in this initiative, such as KPMG, Accenture, NTT, and Mitsubishi. 

MUFG acknowledges that this development is based on the technological advancements that have instigated ongoing diversification in financial transaction methods, such as the rise of ICOs and increased circulation of crypto-assets. 

MUFG, therefore, sees the combination of smart contract technology and security token as ideal in prompting efficient financial transactions. 

ST research consortium’s objectives

The consortium aims at enabling both management and fundraising on the same platform, as well as utilizing digital cash for settlement. Some of the assets to be used include securitized products and bonds. 

The ST Research Consortium also wants to venture into 24/7 trading with the absence of special terminals though it will be available to overseas, retail, and domestic investors. 

The announcement also mentions programmable money based on its instant settlement capabilities. Expressly, immediate delivery or payment is helpful in the reduction of counterparty risk. 

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