Capital markets Government News

Tokyo subsidizes digital securities issuance costs


Japan is one of the most active jurisdictions for tokenization and digital securities. Today the Tokyo Metropolitan Government announced a subsidy for security token issuances.

We expected the subsidy to be small, but it’s pretty significant. The government will cover half the costs or two thirds for startups, with an upper limit of five million yen ($31,785). That amount can be even higher for certain use cases that address social issues or provide new investment experiences for individuals through digital technology. The costs covered include platform fees, consultancy and system development costs.

Tokyo acknowledged two major benefits of security tokens – lower denominations for issuances and the removal of intermediaries.

Meanwhile, Japan’s ruling Liberal Democrat Party has been very supportive of web3 and published its latest white paper on the topic a few days ago. A key goal is to “Make our country the center of web3”. 

One of its action plans aims to promote the distribution of security tokens through private trading systems (PTS). It already created laws supporting stablecoins on public blockchains. Its latest plans include beneficial tax treatment and support for decentralized autonomous organizations (DAOs) and decentralized identity.

However, the ruling party is embroiled in a slush fund scandal and lost all three parliamentary seats in a by-election this weekend. Hence, it’s unclear whether it will be in power to follow through on its plans.

Image Copyright: manjik / Deposit Photos