Japan launches digital securities trading
Japan launches digital securities trading
In December, the Osaka Digital Exchange will launch Japan's first trading of digital securities in the form of security tokens issued by real estate companies Ichigo and Kenedix, amid growing demand among retail investors for assets that offer high returns.
Tokyo-based Ichigo is selling $20.1 million worth of securities backed by real estate investments. Trading is scheduled to begin on Dec. 25.
Security tokens are digital analogs of securities that certify ownership and entitle holders to implement their investment interests (right to shares, dividends, profit sharing, etc.).
The small volume of the Ichigo sale indicates that market participants are still assessing how much demand there will be for non-conventional securities, Bloomberg reported. Japan is trying to implement its program to give retail investors access to riskier but lucrative assets to replenish funds for a rapidly aging population.
Japanese households held more than $13 trillion in financial assets at the end of last year, according to Bank of Japan statistics, but more than 50 percent of those assets were in deposits, which have near-zero interest rates.
Recently, more countries are preparing or have already implemented new rules and regulations that will open up secure tokens to more market participants.
Hong Kong, in particular, is considering allowing retail investors to purchase cryptocurrency exchange-traded funds (ETFs), subject to regulatory requirements.
"We welcome proposals that use innovative technology to enhance efficiency and convenience for clients," said Julia Leung, Chief Executive of the Securities and Futures Commission of Hong Kong (SFC).
Another authority, South Korea's Financial Services Commission (FSC), has issued a set of guidelines defining which types of digital assets will be treated and regulated as securities.
It is worth noting that Ichigo has previously invested in residential real estate and structured digital securities targeted at individual investors and business owners.
The volume of security token offerings in Japan remains small and is mainly focused on the securitization of tourism, real estate, and logistics facilities. According to Progmat, the outstanding amount of the issue is 127 billion yen.
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