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Japanese bank Sumitomo Mitsui launches country’s first ‘A-1’ rated security token

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Japanese bank Sumitomo Mitsui Trust Bank, or SMTB, launched its first asset-backed securities token in partnership with Securitize on March 29.

This instrument is the first Financial Instruments and Exchange Act (FIEA) compliant security token to be launched in the Japanese market. The token received an “a-1” rating from the Japanese rating agency, Rating and Investment Information, Inc., suggesting that the product is very likely to meet its short-term obligations.

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The token was created by tokenizing paper beneficiary certificates representing the investor’s ownership of an underlying asset. SMTB has also established a trust company to manage its underlying securitized investments.

SMTB released the product using Securitize’s security tokenization platform. Securitize was founded in the United States in 2017, before launching a Japanese division that secured backed investments from some of the country’s largest companies, including Sony, SBI and Softank.

In March 2020, Securitize partnered with Tokyo-based LIFULL to create a tokenized real estate investment platform.

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In an announcement shared with UKTN, SMBT’s Hirohito Niji expressed his pride that the bank is embracing digital securities, saying:

“We are committed to proactively developing and delivering innovative solutions to our clients based on their changing needs by combining cutting edge digital technologies and our conventional trusted banking expertise.

SMBT is a member of the Japan Security Token Association alongside local telecommunications giants NTT and Softbank. The company began exploring blockchain in October 2016, when it partnered with IBM to explore the use of DLT to improve the efficiency of its asset management, real estate and retail businesses. bank.

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Security token offerings, or STOs, have been increasingly accepted in Japan recently, with the country’s Financial Services Agency recognizing the Japanese STO association in May of last year.