SBI Group and Ondo Finance to Tokenise Japanese Equities via JPYSC Stablecoin

Ondo Finance has agreed a collaboration with SBI Group under which Ondo Global Markets will tokenise Japanese equities and settle transactions using JPYSC, the first trust-type stablecoin issued in Japan, created by SBI Shinsei Trust Bank. Distribution of the resulting tokenised stocks is expected to run through SBI Group entities, with SBI Securities the likely channel.

The arrangement follows an earlier deal Ondo struck with Deutsche Börse’s Clearstream, whose tokenised stocks trade on 360X, a venue regulated under the European Union’s DLT (Distributed Ledger Technology) Pilot Regime and jointly owned by Deutsche Börse Group and Commerzbank. That venue restricts access to professional investors, making the SBI route potentially broader in reach.

Operators should note the structural reality underpinning Ondo Global Markets’ roughly one billion dollar tokenised stock programme. The tokens are loan notes issued by an unregulated British Virgin Islands entity, backed one-for-one by the underlying shares held in custody at US broker Alpaca, with Ankura Trust holding security over those accounts on behalf of token holders. Holders must be domiciled outside the United States and carry no direct ownership rights in the referenced equities. The trade-off for accepting that elevated credit and structural risk is access to decentralised finance (DeFi) integrations. How Japanese retail and institutional participants will weigh that trade-off, and how SBI Securities frames the product’s risk disclosures, are the key variables to watch as distribution details emerge.