On December 26th, 2019, Huobi’s Japan-based subsidiary, Huobi Japan, announced a $4.6 million investment from Tokai Tokyo Financial Holdings. The funds will support a continued expansion to promote new businesses across the digital asset space.
Tokai Tokyo Invests in Huobi Japan — Explained
Tokai Tokyo Financial Holdings is one of Japan’s oldest securities firms. The company opened its doors in 1908 and currently has 159 offices which handle a collective $39 billion worth of client assets.
Now, Tokai Tokyo is strengthening its presence in the digital space through a $4.6 million investment in Huobi’s subsidiary, Huobi Japan. Haiteng Chen, CEO of Huobi Japan, says the investment demonstrates “greater mainstream recognition” for digital assets.
According to a statement from Tokai Tokyo, their interest in digital assets extends to a variety of areas. These include exchanges, issuance, storage, and management services. More specifically, the statement reads:
“Using the capital and business alliance with Huobi Japan […] we will promote new businesses in the areas of crypto asset exchange, new financing schemes utilizing crypto assets such as Initial Exchange Offering (IEO), local currency issuance, and storage and management service associated with crypto assets. We consider expanding this business to partner regional banks and other regional banks in the future.”
Notably, Tokai Tokyo expanded on the development of blockchain technology with regard to fundraising. Security tokens, says the company, are expanding globally with regulatory frameworks arriving in the near future in Japan. Tokai Tokyo wants to be prepared:
“The financial business using blockchain technology has advanced rapidly in recent years with the application area of crypto assets and Security Token Offering (STO) expanding globally. Here in Japan, the relevant ministerial ordinances are expected in force next spring.”
The deal is estimated to be completed sometime in January of 2020. Previously, Huobi Japan secured nearly $5 million from Financial Products Group (FPG). The funds will go towards an expansion to promote a global financial realm powered by blockchain technology.
Tokai Tokyo’s Involvement in the Security Token Space Explained
The investment in Huobi Japan does not constitute Tokai Tokyo’s entrance into the security token space. Just last month, the company invested $4.58 million for a 4.8% stake in iSTOX.
Based in Singapore, iSTOX is a developing end-to-end security token platform, geared towards regulatory compliance. On November 15th, 2019, the platform made history by completing the “world’s first issuance, custody and trading of a regulated blockchain-based security on a single integrated platform”. The investment made Tokai Tokyo the sole Japanese investor in iSTOX.
According to reports, Tokai Tokyo plans to broker security tokens listed on iSTOX to Japanese investors. They also want to help Japan-based companies launch their own STOs through iSTOX. Some have speculated that Tokai Tokyo will eventually launch its own security token exchange in Japan, through an association with iSTOX. The company has yet to provide any official comment in that regard, however.
One San Francisco-based company has been making waves in terms of security token adoption in Japan. Securitize, a technology provider for the issuance of security tokens, has made notable progress in a Japan-focused expansion.
The firm has received millions of dollars in investments from Japanese entities, acquired tech firm BUIDL, and partnered with the Japan Security Token Association (JSTA). Security tokens certainly seem to be making an impact in the Japanese securities market.
What do you think about Tokai Tokyo investing $4.6 million in Huobi Japan? Will Tokai Tokyo become a major player in the mainstream adoption of security tokens in Japan? Let us know what you think in the comments section below.
Image courtesy of Huobi Group.