Japan Develops Blockchain Infrastructure, South Korea Prepares Digital Asset Law

Japan has begun efforts to create a new financial infrastructure that will enable real-time trading of stocks and government bonds on the blockchain. The Financial Services Agency of Japan, the Ministry of Finance, and the Bank of Japan plan to establish a joint advisory body for this purpose. The comprehensive development phase of the project is expected to commence in early 2024, with the system aimed to be operational by the early 2030s. The system envisions the tokenization of deposits held by commercial banks at the Bank of Japan. These tokens will be used in transactions between financial institutions. Additionally, the aim is to shorten the current settlement periods. In Tokyo, stock trade settlements typically take two business days, while government bond transactions are settled on the next business day.

In South Korea, the framework for the Digital Asset Basic Law is becoming clearer. It is planned to limit the share that dominant shareholders of cryptocurrency exchanges can hold to 20%, but this ratio could rise to 34% for businesses meeting certain conditions. The Financial Services Commission plans to present the draft law to the National Assembly in September. This regulation will be South Korea's first comprehensive framework law regarding virtual assets and will include the classification of cryptocurrency businesses and rules concerning stablecoins.

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