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Japan’s SBI to run security token offering this month, with blockchain bonds to follow

security token offering sto

Today Japan’s SBI group announced plans to allot stock in its SBI e-Sports subsidiary as a security token offering (STO) using the ibet platform. The ibet STO solution was developed by BOOSTRY, a joint venture started by Nomura and Nomura Research Institute (NRI), in which SBI recently invested.

Apart from the third party allotment of the e-Sports shares, SBI also plans to run public bond offerings through subsidiary SBI Securities. Bonds issued by other firms will be underwritten by SBI Securities and offered to SBI Securities customers. Today Nikkei reports that SBI Securities itself was planning a bond issuance in November. 

That follows a bond issuance by BOOSTRY investor NRI six months ago. But the amounts were pretty small, with two issues totaling 30 million yen ($280,000). One of the benefits of STOs is the issuance costs are significantly lower, so smaller issue amounts become more viable. Other advantages include 24/7 trading, the ability to invest smaller amounts, and the potential for instant transfers if there’s cash on-chain, removing counterparty risk.

The blockchain solution logs the issuance of securities, transfers and ownership. This means the only thing that needs to be custodied is the blockchain keys to the tokens. 

The moves are enabled by new Japanese legislation that came into force in May.

BOOSTRY, Nomura and SBI are members of Japan’s Security Token Offering (STO) Association alongside many of Japan’s largest securities firms such as SMBC, Daiwa, Tokai Tokyo and Rakuten.

SBI was also keen to emphasize that these are its first steps and it plans to tokenize other assets such as real estate, fine art, and intellectual property such as games and movies.

The Japanese firm has been prolific in its investments in this space. Its most recent move involved creating a digital asset venture fund in partnership with digital asset bank Sygnum earlier this week. And it’s placed all sorts of bets in the digital asset sector including with Boerse Stuttgart and Securitize.

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