Major Japanese Firms Establishes a Security Token Offering Consortium

Fushimi inari Trail, Kyōto-shi, Japan, Photo by LinMei

With a primary objective to seek approval from Japan’s Financial Services Agency, a group of major firms in the country decided to establish a consortium for security token offerings (STO). The development was reported by the Nikkei Asian Review on September 30. 

The members of the newly-formed STO consortium includes Monex Group, Nomura Securities, SBI Securities, and Daiwa Securities Group. As mentioned, the association would work on drafting a new set of rules for security token offerings and would advocate for the approval of Japan’s financial watchdog. 

The forthcoming legal change inspired the establishment of the STO association in April. Notably, the Japanese government is working on laws amendments that would clarify regulatory concerns, particularly disclosure requirements. Since the news broke out, the number of Japanese brokerages that exhibit interest in STO opportunities has dramatically increased. It’s understandable as a security token offering presents itself an ideal option for companies to raise funds from assets such as real estate. 

An STO is almost the same as an ICO (initial coin offering). Investors are given with tokens that represent their investment. However, as opposed to the latter, the investment contract in a security token offering relies on an underlying investment asset such as funds, bonds, stocks, and real estate investment trusts. However, it’s worth noting that the surge of interest for STOs in Japan would depend on the consortium’s efforts and achievements in protecting investors. 

STOs paved the way for ordinary investors to take part in project financing. In the movie industry, for example, several tokenized projects had been opened to a massive pool of investors. 


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