Completion of Development for PQC Decentralized Registry Management System for Security Tokens (ST)

Digital Asset Markets Inc. (Headquarters: Chiyoda-ku, Tokyo; CEO: Kazuya Nishimoto, hereinafter referred to as “Digital Asset Markets”) is pleased to announce the completion of core technology development and the acquisition of related patents for a Post-Quantum Cryptography decentralized registry management system for security tokens (hereinafter referred to as “ST”).

Background

Issues Related to ST Registry Modification

Security Tokens (ST) require the amendment of registries (e.g. bond registry and beneficial interest registry) to meet requirement to perfection against a third party. Traditionally, financial institutions selling STs individually amend the registries. Consequently, there were system barriers when modifying data between different financial institutions.

Issues Related to Quantum Computer Cryptanalysis Measures in Financial Systems

While research is progressing worldwide on the practical application of quantum computers with significantly higher processing capabilities than conventional computers, there are concerns about security risks where quantum computers could break existing cryptographic technologies (such as RSA) used by financial institutions. Experts predict that these security risks could become apparent by 2030, necessitating financial institutions to transition to quantum-resistant cryptography in their financial systems by then.

Core Service: “Digital Shelter”

 “Digital Shelter” incorporates features to complement the weaknesses of multivariate polynomial cryptography (referred to as bidirectional agreement decryption), implementing quantum computer cryptanalysis resistance (PQC). This data preservation service provides the highest level of protection against existing cyber attacks, quantum computer attacks, natural disasters, and internal threats for sensitive information such as personal data and confidential information from government agencies and businesses. Additionally, the data structure managed by Digital Shelter  enables us to plan several new businesses with our partners.

About the Quantum-Resistant Decentralized Registry  Management System

By transitioning from a centralized to a decentralized system, we ensure integrity and availability while applying our Digital Shelter service to add quantum-resistant cryptographic technology, achieving high confidentiality. This feature allows financial institutions to synchronize the rewriting of user registries, thereby reducing the time required for ST transactions and settlements. This process integrates the current dual structure of “traditional centralized processing” and “blockchain” into a single structure, enabling the realization of the inherent ST structure. In the future, we will develop it as a system for real-time gross settlement (RTGS) of securities transactions using stable coins.

Use Cases for the Quantum-Resistant Decentralized Registry Management System

• Real-time gross settlement (RTGS) of financial transactions achieving high convenience and low cost

• Securitization of monetary claims (accounts receivable, rental claims, etc.)

•  Various other business use cases

About the Acquired Patents

 To prevent third-party patent claims when designing, implementing, and providing digital asset-related systems, Digital Asset Markets and Intertrade Co., Ltd. (Headquarters: Chuo-ku, Tokyo; CEO: Kazuya Nishimoto, TSE Standard 3747) jointly acquired related patents. Below are some of the acquired patents:

Patent Number	Patent No. 7425427
Invention Title	Digital Asset Trading and Clearing System
Patent Holders	Kazuya Nishimoto, Digital Asset Markets Co., Ltd., Intertrade Co., Ltd.
Inventor	Kazuya Nishimoto
Summary	Provides a digital asset trading and clearing system capable of improving the liquidity of large digital assets and efficiently and promptly processing trading and clearing.

Patent Number	Patent No. 7425427
Invention Title	Digital Asset Trading and Clearing System
Patent Holders	Kazuya Nishimoto Digital Asset Markets Co., Ltd. Intertrade Co., Ltd.
Inventor	Kazuya Nishimoto
Summary	Provides a registries management system that improves the efficiency  of updating registries with frequent rights transfer information changes and reduces the risk of personal identifiable information leakage.

Company Information

Digital Asset Markets aims to become a “platformer supporting next-generation digital swaps,” contributing to the development of economic and social activities through digital assets.

Company Name	Digital Asset Markets, Inc.
CEO	Kazuya Nishimoto
Location	8th Floor, Kawakita Memorial Building, 18 Ichibancho, Chiyoda-ku, Tokyo 102-0082, Japan
Established	August 1, 2018
Company URL	https://corp.digiasset.co.jp
Business Activities	Utility Token Business Security Token Business Data Protection Business
Registration	Crypto Asset Exchange Operator, Kanto Finance Bureau Director No. 00024
Shareholders	Intertrade Co., Ltd. Mitsui & Co., Ltd. Japan Exchange Group, Inc. and others
Affiliated Organizations	Japan Virtual Currency Exchange Association (JVCEA) Type I Member Fintech Association of Japan Corporate Member Japan Security Token Association (JSTA) Supporting Member