Earlier this year, Securitize announced a plan to bring security tokens to the Asian securities market. Now, as the year comes to a close — the firm’s efforts have been notably consistent, with the most recent headline featuring a ‘seven-figure’ investment from a Japanese conglomerate. Is Asia about to become a leading market for the tokenization of securities?
Securitize Bringing Security Tokens to Japan Explained
San Francisco-based Securitize is a technology provider for firms wishing to integrate blockchain technology with regulated financial securities. This integration results in security tokens, which are also referred to as digital securities.
In January of 2019, Securitize teamed up with Coinstreet Partners and STO Global-X to bring security tokens to the ‘untapped’ Asian market. This past summer, Securitize partnered with the Japan Security Token Association in an effort to strengthen its presence in the Asian market.
Then, in September, Securitize announced a $14 million raise in a Series A extension from strategic partners to include Banco Santander, MUFG, and Nomura Holdings. It brought the firm’s total amount raised to north of $30 million.
Now, with the end of 2019 approaching, Securitize has announced a ‘seven-figure’ investment from Japanese financial services conglomerate, SBI Holdings. The exact amount of the investment was not made public.
Securitize currently has a subsidiary in Japan. According to Carlos Domingo however, the company’s CEO, the funds will be used establish a new office in Japan. The office is scheduled to be up by the end of 2020. Domingo says,
“We’re going to do business there and that involves not only finding customers in Japan, but also localizing the technology and making sure you know the language for the next similar types of integrations that you might be looking at.”
Notably, Yoshitaka Kitao — the CEO and president of SBI Holdings — said he has a strong faith in the future success of security tokens. He also regards Securitize as a “leading player” in the nascent industry.
The Ongoing Push for Security Token Adoption
The tokenization of securities has seen much anticipation from a number of entities. Touted benefits of security tokens when compared to their legacy counterparts include added liquidity, the removal of costly middlemen, faster settlement cycles, fractional ownership, global markets connected 24/7/365 — the list goes on and on.
Yet while nearly $1 billion has been invested into the space, security token adoption hasn’t come overnight. A recent example of faltering real estate tokenization shows how the infrastructure will simply take time to build. Only once such an infrastructure exists, will high quality offerings — and eventually, institutional capital — enter the space.
Besides Securitize, the Asian security token market continues to see developments. Just a few weeks ago, iSTOX announced a live secondary market which completed the “world’s first issuance, custody, and trading of a regulated blockchain-based security on a single platform”.
As far as Securitize is concerned, Domingo says such interest only strengthens the idea of security token adoption as inevitable:
“I think that the fact that [SBI is] putting their faith and investing in a company like us [is] signifying the move towards more adoption of security tokens.”
What do you think about Securitize receiving a seven-figure investment from SBI Holdings and continuing to break into the Asian securities market? We want to know what you think in the comments section below.
Image courtesy of CareeBiz.