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Sumitomo Mitsui Trust Bank (SMTB) has launched its first security token using the Securitize platform on March 29. Compliant with the Financial Instruments and Exchange Act (FIEA), the token has also received “a-1 rating” from the Japanese rating agency, Rating and Investment Information, Inc.
Sumitomo Mitsui Issued the Security Token Using Securitize
Sumitomo Mitsui Trust Bank issued the instrument using Securitize’s security tokenization platform. This will provide SMTB to manage their investors including compliance, while investors can access documents relating to the token and its status through the platform.
Securitize was founded in the United States in 2017. A Japanese division has also been launched with backings from leading Japanese companies such as Sony, SBI, and SoftBank.
The product is the first security token compliant with the Financial Instruments and Exchange Act (FIEA) to be launched in Japan.
A trust company was also created to manage SMTB’s underlying securitized investments.
Usually, investors have ownership in the trust through a paper-based beneficiary certificate. In this case, the token was created by tokenizing the paper-based beneficiary certificates representing investor ownership.
SMBT’s Hirohito Niji remarked on the bank adopting digital securities, saying:
“We are committed to proactively develop and deliver innovative solutions to our customers with their changing needs by combining cutting-edge digital technologies and our conventional trust bank expertise.”
SMBT is a member of the Japan Security Token Association. The firm initially began exploring blockchain in October 2016, when they teamed up with IBM to explore using DLT.
The Rise of Japan’s STO Ecosystem
Tokenized securities and Security Token Offerings are getting increased attention in Japan.
The country has managed to mobilize into a leading security token hub within a year. For instance, in May 2020, Japan’s Financial Services Agency recognized the Japan STO association, the self-regulatory body for security token offering in the country.
Earlier last week, Japan-based SBI Securities announced altering its compliance registration that enables issuing security tokens to retail investors.
One can expect Japanese assets and equities to reach foreign audiences via STOs and vice-versa, all the while opening newer avenues for Japanese investors to participate in.