Japan-based bank Sumitomo Mitsui Trust Bank has partnered with Securitize to launch Japan’s first security token that complies with the country’s Financial Instruments and Exchange Act.
The instrument is the first ever security token compliant with the Financial Instruments and Exchange Act (FIEA) to launch in the country’s Market. Token has received an “a-1” rating from a Japanese rating agency named Rating and Investment Information, Inc, suggesting the product is very likely to fulfill its short-term obligations.
The token was created by tokenizing paper-based beneficiary certificates representing investor ownership to an underlying asset. The bank has also created a trust company to manage its underlying securitized investments.
Sumitomo Mitsui Trust Bank has issued the token using Securitize’ security tokenization platform. Securitize was founded in 2017 in the US, before the launch of Japanese division that secured investment backed by some of the country’s leading companies like Sony, SBI, and Softank. In March 2020, Securitize partnered with Tokyo-based firm LIFULL to build a tokenized real estate investment platform.
In an announcement shared with Cointelegraph, SMBT’s Hirohito Niji expressed pride in the bank embracing digital securities, stating:
Sumitomo Mitsui Trust Bank is also a member of the Japan Security Token Association alongside local telecom giants NTT and Softbank. The bank first started exploring blockchain in October 2016, when they partnered with tech giant IBM to explore using DLT to improve the efficiency of its asset management, real estate, and banking businesses.
Security token offerings (STOs) have recently been gaining mass acceptance in Japan, with the country’s Financial Services Agency recognizing the Japan STO association in May last year.