Japan FCA allows JPX to adopt fintech

Japan’s Financial Services Agency has permitted Japan Exchange Group (JPX) to use fintech such as blockchain as a trading platform since, it could make trading more efficient, Nikkei reported.

The Financial Services Agency (FSA) will approve the fintech adoption on a case-by-case basis. Also, the Tokyo Stock Exchange (TSE) is planning to test blockchain-based trading proof-of-concepts for as early as spring.

JPX subsidiaries were previously limited by the Financial Services Agency to activities that are directly linked to exchange operations like system development. The new, broader interpretation of their duties allows the group to introduce technology that contributes to the smooth running of trading platforms.

Apart from blockchain, the possible areas of fintech exploration include artificial intelligence and others. JPX companies will be able to invest in startup firms that are working with these technologies. With the help of Japan, Myanmar's Yangon Stock Exchange is wrapping up tests of blockchain-based trading. It is also looking to put a practical system in place.

Another exchange operator Nasdaq is also testing blockchain-based trading with the launch of Linq, a trading platform that enables private companies to trade shares over a distributed ledger.