Japan's FSA Says Current Law Complicates DTCC-Style Omnibus Account

Japan’s Financial Services Agency (FSA) is exploring blockchain trading for securities, but Japanese account law makes it difficult to use the digital omnibus account central to a U.S. tokenization model. The issue centers on Japan’s book-entry system, where account records determine investors’ direct rights to securities. Current law limits the purposes for which a securities depository can open an account in its own name. That restriction complicates a pooled digital account like the one in the Depository Trust & Clearing Corporation’s (DTCC) model. At a Tuesday, Oct. 20, meeting, the FSA examined tokenization alongside stablecoins and decentralized finance. No securities held through Japan’s book-entry accounts — including government bonds, corporate bonds, investment trusts and stocks — have yet traded on chain.

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