18 Nov 2019
A report from the Nikkei Asian Review sent ripples all over the continent. A company based in Japan, Tokai Tokyo Financial Holdings made it clear it was investing in the development of the security token platform iSTOX. This investment is believed to trigger a rise in the level of security token usage in the Far East Asian nation. Some analysts even believe that it can become even cause the formation of Japan’s own security token exchange platform later on. The news has been greeted with hope and optimism, and with understandable caution from some quarters.
Located in Tokyo, Tokai Tokyo Financial Holdings is a financial services venture. It consolidated its entry into the security token industry via an exchange in Singapore. However, it has the ability to cause widespread adoption of security tokens in Japan.
The venture means serious business. It is planning to invest about half a billion yen, which comes to over $4.5 million. This investment is equal to almost a 5% slice of the enterprise backing the iSTOX. It is a comprehensive end-to-end security token platform. iSTOX also has some interesting deals for stakeholders. It has initial issuance and tokenization services for the stakeholders. This is in addition to trading services on the secondary market platform too.
iSTOX has its hub in Singapore and its mother company is the Heliconia Capital Management and Singapore Exchange (SGX). It is interesting to note that Singapore Exchange will establish a venture to run iSTOX in the nearest future. When this is done, Tokai Tokyo will become the only investor from Japan in the enterprise. But it is not the only big Asian player in the deal. Another big player in the venture is Temasek Holdings. It is a government fund from Singapore and it controls over 10% of the ownership.
iSTOX is subjected to approval and clearance from the Monetary Authority of Singapore (MAS). MAS is the central bank and regulator of the financial sector in Singapore and it is expected to grant iSTOX the needed licensing in the first quarter of 2020. If it all goes according to plan, iSTOX is going to be the pioneer as far as regulated security token exchanges in Singapore are concerned.
Security tokens typically use conventional financial securities and assets like investment funds, valuables, and real estate. They also include the advantages of blockchain technology. These advantages are the transparent financial platform, joint ownership, absence of middlemen, reduced costs of operations, increased liquidity and others. All these advantages mean a higher level of efficiency and a more cost-effective way of doing business.
In Japan, the approval for security tokens is believed to come into force in the first quarter of 2020. Some analysts are of the opinion that the involvement of Tokai Tokyo in the realm of tokenized securities is going to change everything for Japan as a whole. The venture is getting ready and it is making moves to broker security tokens present on iSTOX to investors in Japan.
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