Japan sees first regulated security tokens issued

Sumitomo Mitsui Trust Bank (SMTB) and the security-token issuance technology provider Securitize conducted a private placement of Japan’s first such instrument in accordance with local law.

In Japan, companies are showing growing interest in primary issuance of security tokens (STOs). SMTB is a member of the Japanese Security Tokens Association, recognised by the Financial Services Agency.

What are security tokens and Security Token Offering (STO)?

The token was created by tokenising the depositary certificates of the beneficiaries, representing the investor’s ownership stake in the underlying asset. For this, the platform of the startup Securitize was used, whose Japanese unit had previously received investments from Sony, Nomura, MUFG, SBI Holdings and SoftBank.

On the provider’s technology platform, investors can verify the status of the tokens and access documents, while SMTB manages the processes accompanying the issue, including regulatory compliance.

Rating and Investment’s rating agency assigned the issued security token a rating of “a-1”. It reflects a high likelihood that the issuer will meet its short-term obligations to creditors.

In April 2020, Securitize added the ability to buy and sell security tokens almost instantly via a web link through the Instant Access service, using smart contracts.

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