Tokyo FinTech
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Tokyo FinTech

Zipangcoin — Japan’s first gold-backed virtual asset

Zipangcoin (ZPG) is a cryptographic asset issued by Mitsui Digital Commodities (MDC), a wholly owned subsidiary of Mitsui, the behemoth Japanese trading firm. ZPG has been launched on Digital Asset Markets (DAMS) in February, one of 32 licensed cryptocurrency exchanges, where it is currently the sole listed asset.

DAMS shareholders include Intertrade, which provides trading systems for JPX’s Tokyo Stock Exchange, Mitsui, Seven & I and — most recently — JPX.

One ZPG is a crypto asset that has the same value as one gram of gold (converted to JPY, currently JPY ~8,000), based on the bilateral trading market at the London Metal Exchange and reflecting market-based trading spreads. This implies that outside of the customary overseas trading hours, trading liquidity will be somewhat limited, and bid/ask spreads will be larger.

In these early days for the asset, there are some limitations that will be addressed in the future:

  • Digital Asset Markets is currently the only trading venue for ZPG — additional exchanges are also expected to be supported from May onwards
  • ZPG is the only asset trades on Digital Asset Markets — MDC plans to issue other tokens backed by different commodities, e.g. oil, in the future
  • ZPG is currently not exchangeable for physical gold

Technically, Zipangcoin has been implemented on miyabi by bitFlyer Blockchain as a private blockchain.

Currently, the Tokyo Stock Exchange (TSE) has listed three Exchange Traded Funds (ETFs) that offer investors gold exposure, either in physical or futures form. These three have been listed for 12–15 years. Among them, the Mitsubishi Japan Physical Gold ETF has the highest trading volume — almost a quarter million ETFs changed hand last Friday.

  • 1328.T — NEXT FUNDS Gold Price Exchange Traded Funds (futures)
  • 1540.T —Mitsubishi Japan Physical Gold ETF

Given the limitations in the still nascent market for commodities-backed virtual assets, these might be an altogether easier way to obtain the desired exposure.

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Norbert Gehrke

Passionate about strategy & innovation across Asia. At home in Japan. Connector of people & ideas.