Japan-based bank Sumitomo Mitsui Trust Bank, or SMTB, has launched its first asset-backed securities token in partnership with Securitize on March 29.
The instrument is the first security token compliant with the Financial Instruments and Exchange Act (FIEA) to launch in the Japanese Market. The token has received an “a-1 rating” from Japanese rating agency, 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. SMTB has also created a trust company to manage its underlying securitized investments.
SMTB issued the product using Securitize’ security tokenization platform. Securitize was founded in the United States in 2017, before launching a Japanese division that secured investment backed from some of the country’s leading companies including Sony, SBI, and Softank.
In March 2020, Securitize partnered with Tokyo-based LIFULL to create a tokenized real estate investment platform.
In an announcement shared with Cryptox, SMBT’s Hirohito Niji expressed pride in the bank embracing digital securities, stating:
“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 alongside local telecom giants NTT and Softbank. The firm first began exploring blockchain in October 2016, when they teamed up with IBM to explore using DLT to improve the efficiency of its asset management, real estate, and banking businesses.
Security token offerings, or STOs, have recently been gaining mainstream acceptance in Japan, with the country’s Financial Services Agency recognizing the Japan STO association in May last year.
