Japan Securities Clearing Corporation (JSCC) today announced that it will use blockchain to settle rubber futures. Blockchain is being used to digitize the paperwork associated with the physical delivery of rubber when futures contracts expire. JSCC is now eyeing the potential of large commodities such as gold and platinum.
JSCC is Japan’s leading central exchange, responsible for clearing Tokyo Stock Exchange trades, listed commodity derivatives, and several types of over-the-counter (OTC) trades, including credit default swaps and Japanese government bonds.
In Japan, rubber futures are settled using “delivery orders”, similar to US proof of shipment. The seller receives a document with a seal confirming the storage of the goods by the warehouse manager. The document is then sent to the buyer for settlement.
Instead of paperwork, blockchain tokens are created, validated by warehouses, and transferred online to buyers. The new methodology applies to his January delivery contract, so it will be settled and delivered tomorrow.
In contrast to warehouse receipts that can be used as collateral, delivery orders are not considered collateral in Japan. The Japanese Ministry of Justice is therefore expected to explore the legal feasibility of tokenizing warehouse receipts for this purpose.
JSCC is a subsidiary of Japan Exchange Group (JPX), which also owns the Tokyo Stock Exchange. In terms of metal products, JPX last year invested in Digital Asset Markets (DAMS), a tokenized gold-backed token issued by Mitsui & Co.
Last year, as part of its medium-term strategy, JPX said it would launch a tokenized securities market by April 2025. In the meantime, he is also looking into a green bond blockchain and has joined the Progmat consortium to support his MUFG-initiated blockchain platform which is tokenized. Securities, stablecoins and utility tokens.