Sumitomo Mitsui Trust Bank to Issue Japan's First Security Tokens – Nasdaq

Tokyo, Japan

Sumitomo Mitsui Trust Bank, one of Japan’s largest banks, has completed its first asset-backed security token issuance pilot.

The bank announced Monday it has converted Japan’s first certificates of ownership backed by securities into security tokens, and is conducting a trial on the digital asset issuance platform Securitize Japan, a unit of Securitize Inc., according to CoinDesk Japan

The method of raising funds through the issuance of security tokens is called a security token offering (STO). Investors are issued a digital token that represents a physical investment to be stored on a blockchain.

Related: Indians Want Bitcoin Despite Government Stance

Security tokens became famous in 2018, following the initial coin offering (ICO) boom. Unlike ICOs, STOs were meant to represent a security regulated and traded in accordance with securities regulation. Despite the hype, STOs failed to take off for the most part, particularly in parts of Asia. In fact, in 2018, Beijing’s financial authority warned that STOs were illegal. 

The security tokens issued in Japan’s effort have a short-term rating of “a-1” given by the Japan’s leading credit rating service, Rating and Investment Information, and will be launched within the month, according to the announcement. The security tokens are also compliant with Japan’s Financial Instruments and Exchange Act (FIEA), according to a statement from Securitize Japan. 

For the pilot, the bank created beneficiary certificates representing the asset-backed securities and tokenized them on the Securitize platform, the statement said.  

Another influential Japanese financial institution, SBI Holdings, announced three days ago it had also completed registration requirements to handle STOs. Additionally, Nomura Holdings, Mizuho Financial, Mitsubishi UFJ Financial and others have been researching and developing digital securities backed by assets such as bonds, stocks and real estate, according to CoinDesk Japan.

READ  Global Fanless Medical Box PC Market Opportunities 2020 | ACL GmbH, ICO Innovative Computer GmbH, BriteMED, Advantech, Hewlett-Packard - The Courier

Related: Michael Jordan, Mark Cuban Making Big Investments into NFT Platforms, PayPal Pushes Crypto Further Mainstream and More

Sumitomo Mitsui Trust will continue to research the issuance and management of security tokens for the STO market, according to the announcement. The bank will also be looking into security tokens as a way to connect investors with long-term social impact objectives like the United Nations Sustainable Development Goals (SDG) and Environment, Society and Corporate Governance (ESG).

Related Stories

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Please enter your comment!
Please enter your name here