Japan's Security Token Market Flourishes in Fy2023, Poised for Sustained Expansion

In FY2023, Japan's Security Token Market underwent significant growth, with total issuance exceeding JPY90 billion. Beneficiary certificate issuance trusts dominated the market, accounting for 85%, followed by corporate bonds at 13%. The number of financial institutions handling security tokens increased, including brokerage firms, banks, and asset management companies. "ibet for Fin," a consortium-type blockchain network, became the leading blockchain infrastructure provider, supporting transactions and management in the market.

Japan's Security Token Market Blossoms in FY2023, Poised for Continued Growth

Tokyo, Japan - April 2, 2024 - BOOSTRY Co., Ltd., a leading provider of blockchain solutions for the financial industry, today unveiled its comprehensive Japan Security Token Market Report for FY2023. The report paints a vibrant picture of a market that has swiftly evolved from its initial stage of experimentation to widespread practical use, firmly establishing itself as an innovative financing mechanism in the capital markets.

Surge in Issuance Value and Product Diversification

The Japanese security token market experienced a remarkable surge in issuance value in FY2023, reaching an impressive JPY 97.6 billion, representing a remarkable 5.8-fold increase compared to the previous year. This substantial growth accounted for 16% of the annual issuance value in Japan's stock market and an astonishing 31% of the annual issuance value in the listed REIT market, demonstrating the significant impact of security tokens in the capital markets.

Notably, FY2023 witnessed three significant issuances surpassing JPY 10 billion for the first time, underscoring the growing capacity of the market to cater to diverse financing requirements.

The composition of security token products also exhibited a discernible shift towards diversification. While real estate beneficiary certificate issuance trusts remained the dominant category, accounting for 85% (JPY 82.5 billion), corporate bonds emerged as a significant segment, contributing 13% (JPY 13.2 billion). Additionally, novel initiatives emerged, such as securitization through silent partnerships and security tokens incorporating limited liability partnerships for investment purposes.

Institutional Investors Join the Fray

The inclusion of a substantial digitally tracked green bond issued as security token corporate bonds paved the way for institutional investors to actively participate in the security token market. Trading for real estate beneficiary certificate issuance trusts commenced through exchanges utilizing private trading systems (PTS), further enhancing accessibility and liquidity.

Financial Institutions Embrace Security Tokens

The number of financial institutions handling security tokens witnessed a notable increase, including 11 brokerage firms, six banks/trust banks, and nine asset management companies. Distribution firms (brokerage firms and registered financial institutions) increased by five year-over-year, while the count of trustees and bond administrators (banks and trust banks) rose by two year-over-year.

Notably, the number of firms engaged in the issuance of securitized products expanded, with four corporate bond issuers (+1 year-over-year), six asset management companies involved in beneficiary certificate issuance trusts (+3 year-over-year), and three asset management companies involved in other products (+1 year-over-year).

ibet for Fin Dominates Blockchain Infrastructure

ibet for Fin, a consortium-type blockchain network for security tokens, emerged as the market leader, capturing a commanding 53% share of the blockchain infrastructure market in terms of issuance value (JPY 51.6 billion). BOOSTRY, a key participant in ibet for Fin, played a significant role in establishing the network as the only shared blockchain platform in Japan that facilitates the secure and efficient trading and management of security tokens.

Progmat, a blockchain platform utilized by Mitsubishi UFJ Trust and Banking Corporation, held a 45% share, excelling in real estate beneficiary certificate issuance trusts with 14 issuances. Hash DasH and Securitize also made notable contributions, with issuances valued at JPY 1.8 billion and JPY 0.3 billion, respectively.

Bright Future for Security Tokens

The report projects a continued expansion of the security token market in FY2024, as demonstrated by the increasing issuance value, liquidity, and participation of financial institutions.

ibet for Fin and other public-type blockchains, which leverage the inherent advantages of blockchain technology and resist monopolization by individual entities, are expected to play a pivotal role in the market's growth.

BOOSTRY anticipates that FY2024 will witness groundbreaking funding transactions and innovative investment experiences enabled by security tokens, further showcasing their transformative potential.

Methodology

The report's findings are based on a comprehensive analysis of data from BOOSTRY's vast network of industry professionals, combined with publicly available information. The report provides a detailed overview of the Japanese security token market, including issuance amounts, product breakdown, financial institutions involved, and blockchain infrastructure utilization.

BOOSTRY's Japan Security Token Market Report is an indispensable resource for stakeholders in the financial industry, including investors, issuers, financial institutions, and regulators. The report offers invaluable insights into the current state and future trajectory of this rapidly evolving market.

About BOOSTRY

BOOSTRY Co., Ltd. is a leading provider of blockchain solutions for the financial industry. BOOSTRY's mission is to empower financial institutions and businesses with the power of blockchain technology to create innovative and efficient financial products and services.

BOOSTRY offers a comprehensive suite of blockchain solutions, including the ibet for Fin consortium-type blockchain network, token issuance services, and asset management platforms. BOOSTRY's solutions are designed to meet the unique needs of financial institutions, enabling them to leverage the benefits of blockchain technology to improve operational efficiency, reduce costs, and enhance customer experiences.

With a team of experienced blockchain engineers and financial professionals, BOOSTRY is committed to providing the highest quality blockchain solutions and services to its clients. BOOSTRY is headquartered in Tokyo, Japan, with offices in London, New York, and Singapore.

For more information, please visit https://www.boostry.jp/en/