sandmark.com
Sumitomo Mitsui Trust Bank (SMTB), Japan's largest trust bank by assets under trust, openly framed its newest onchain project as an entry into the tokenized money market fund (MMF) category defined by BlackRock's BUIDL and Franklin Templeton's BENJI.
According to its press release on 9 Jul, SMTB will tokenize the beneficiary interests of a Cayman Islands fund on Ethereum as a proof of concept (PoC). Beneficiary interests are the investor's proportional claim on assets held by a trustee, functionally the Japanese trust-law equivalent of fund shares. They will be treated as digital securities under Japan's Financial Instruments and Exchange Act.
Structure and custody
It would be a first for a Japanese trust bank, by SMTB's own assessment: tokenizing an overseas fund interest on a public chain, and a shift from a security token market that has been dominated by real-estate products on private networks.
The fund holds short-term US-dollar bonds and cash equivalents. The interests generated from the fund qualify as electronically recorded transferable rights, Japan's legal category for digital securities.
SMTB group entities cover most of the operational roles: Amova Asset Management UK manages the fund; SMT Fund Services (Ireland) handles administration and the investor registry; while Sumitomo Mitsui Trust Bank (US) holds custody. SMTB itself runs tokenization, issuance and redemption with Securitize Japan and Fireblocks support, aiming for issuance during fiscal 2026 through end-March 2027 pending regulatory confirmation.
Offshore as workaround
SMTB frames the offshore vehicle as a workaround. "Waiting for domestic legislation takes too long," Kazuhiko Tajimi, senior researcher at SMTB's I&T Strategy Planning Department, told NADA News. Foreign domicile is "not a novelty but a means," his colleague Yuto Yamanaka added.
Domestic rules, tied to Japan's book-entry system, still block onchain settlement for continuously traded funds. The stated endgame is tokenizing yen-denominated Japanese trusts once regulation allows.
Category benchmarks
According to rwa.xyz, the tokenized US Treasury and MMF category held $14.86bn as of 10 Jul, up from about $4bn at end-2024. BlackRock's BUIDL, launched on Ethereum in Mar 2024 via Securitize, sat at $2.23bn on the same snapshot; Franklin Templeton's BENJI, launched on Stellar in 2021, at $2.48bn across its Benji product family. Both hold short-dated US Treasuries, cash and repo. SMTB's Cayman fund adopts the same asset mix and, on Ethereum, the same chain as BUIDL.