• Michael Bacina

Security Token Offerings To Debut In Japan Next Year

Updated: Oct 7, 2019


In an attempt to catch up to the rest of East Asia, Japan has pushed forward plans to allow digital security offerings as early as April next year.


Leading Japanese old-line and online brokerages formed an association on Tuesday in order to set clear rules for issuing blockchain-based digital securities.


The association have planned to propose rules for self-regulation, involving greater clarification of disclosure requirements to the Japanese Financial Services Agency (FSA) by March 2020. A securities watchdog will also be established in order to assure digital securities are monitored.


How well the association does in establishing a framework for protecting investors will play a significant role in determining the viability of such offerings in Japan. Initial coin offerings outside of the Japanese regulatory scope flourished for a period of time, only for the momentum to drastically dissipate amid a number of fraud cases.


Other associations have formed around digital securities in Japan previously, but without brokerages involved, there was an ever present hurdle to FSA approval.


Japan has a long history of embracing blockchain, with Bitcoin recognised as legal tender and the infamous Mt Gox at one point handling more bitcoin transactions than any other exchange (the legal fallout from the Mt Gox hack continues to this day, with the head of a creditors group quitting in April and a Russian law firm recently offering to act to recover Mt Gox customer funds for a measly 50-75% of the amount recovered!).

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