Growth exceeding expectations in 3 years, aiming for real estate ST of 2.5 trillion yen in 2030[Digital Securities Forum 2023 Event Report, Part 1]| CoinDesk JAPAN

This year’s third Digital Securities Forum was held on December 13th at KABUTO ONE Hall in Kabutocho, Tokyo. The event was co-sponsored by Nihon Keizai Shimbun and N.Avenue, which operates CoinDesk JAPAN.

When the first event was held in December 2021, the subtitle was “A new method of fundraising: the emergence of security tokens,” but this time it was “The dawn of a new chapter in the security token market”. In the three years since the first security token was issued in 2021, the amount issued has more than doubled every year. As the title “The Beginning of a New Chapter” symbolizes, sales will soon begin on Osaka Digital Exchange’s (ODX) START, the first domestic secondary market, and further growth is expected. There is. Furthermore, in addition to real estate security tokens (real estate ST), which have grown faster than those involved originally envisioned, assets such as corporate bond ST are also expected to expand.

The forum began with an opening speech from Mamoru Yanase, Deputy Director-General of the Financial Services Agency’s Policy Bureau. Next, two lectures and two panel discussions were held, with key figures driving Japan’s security tokens on stage.

I will share the details of the day in two parts: this article (first part: two lectures) and the second part (two panel discussions).

Part 2: A 10 billion yen deal appears in real estate ST and corporate bond ST, entering a new phase with secondary market and asset expansion[Digital Securities Forum 2023 Event Report, Part 2]

Create new use cases together

Mr. Yanase, who gave a speech for the second time last year, said, “I’m glad that the digital securities market is expanding,” and “its potential is widely understood and is expanding.” In response, the Financial Services Agency said, “We will continue to adapt to changes in the external environment.” We will take appropriate measures to address the system.”

Mr. Mamoru Yanase, Deputy Director-General, Policy Bureau, Financial Services Agency

In addition, regarding the efforts of the Financial Services Agency since the enforcement of the revised FIEA (Amendment of the Funds Settlement Act, Financial Instruments and Exchange Act, etc.) in May 2020, we will discuss the framework for security tokens (digital securities) and stable coins using blockchain. Looking back on the process of organizing the “FIN/SUM 2024”, which will be held for the 8th time in March 2024 as a new initiative, we will continue toJapan Fintech Week 2024” was announced for the first time. “We would like to create new use cases for the financial market together with industry players.”

Healthy market growth with participation of diverse players

Next, Tatsuya Saito, Representative Director, Founder and CEO of Progmat, took to the stage and gave a lecture entitled “Looking back on the 2024 direction of the digital securities market using data.” Mr. Saito had participated twice in the past as a product manager in the Digital Asset Business Office of the Digital Planning Department of Mitsubishi UFJ Trust and Banking Corporation, but Progmat became an independent company in October. This year, he took the stage in a style that embodies a startup working on digital assets.

Progmat Representative Director Founder and CEO Tatsuya Saito

Mr. Saito provides detailed information online. On this day as well, he introduced various data related to security tokens, saying, “I have 20 minutes, but I have prepared 20 slides.” The issued balance is expected to reach “over 145 billion yen” in 2023, and will more than double every year from 2021. Furthermore, he explained that the figures are only those that could be compiled from the disclosure system, and the actual issuance amount is likely to be higher. We analyzed industry trends in detail, including the number of issues issued, the amount issued, and the breakdown of issuers and trustee companies.

Unique points seen from the data include “the emergence of new asset management companies,” “progressing diversification of issuance contracts among trust banks,” “growth of Internet sales,” and “existence of repeat customers,” and various players. He concluded that by contributing to market expansion, “healthy market growth” is being achieved.

Regarding the direction for 2024, he stated that he would “explore what’s next for real estate” as a backing asset, pointing out the possibility of corporate bond security tokens (corporate bond ST). He stated that the key is whether or not it is possible to create a more efficient infrastructure than the currently used “book-entry transfer bonds,” and one of them is the corporate bond pre-marketing system “Biancha” and Progmat (progmat) developed by Daiwa Securities and SBI R3 Japan. Programma) to improve the efficiency of corporate bond issuance.

Furthermore, the “Digital Asset Co-Creation Consortium (DCC)” sponsored by Progmat will begin a joint study on security tokenization (digital securitization) of venture capital (VC) investments.With ODX’s full-scale operation, we will start a joint study on security tokenization (digital securitization) of venture capital (VC) investments. He touched on the idea of ​​considering ways to improve the efficiency of payments using stable coins, which are expected to appear in 2020.

Aiming for a 2.5 trillion yen market in 2030

Next, Akihiro Nakao, Executive Officer and Director of Digital Securitization at Kenedix, gave a lecture titled “The Future of Real Estate Investment Created by Security Tokens.” As one of the largest real estate management companies in Japan with assets under management of 3.2 trillion yen, Kenedix will open Japan’s first real estate ST in August 2021 and the largest large-scale real estate ST in Japan worth over 10 billion yen in August 2022. In ODX “START”, which will start trading on December 25, 2023, he is handling one of the two new issues.

Mr. Akihiro Nakao, Executive Officer, Digital Security Department, Kenedix

Mr. Nakao first explained the potential size of Japan’s real estate investment market. The value of domestic real estate is 2,606 trillion yen, of which 290 trillion yen is profitable real estate that can earn rental income from tenants, and 47 trillion yen of real estate has already been securitized by J-REITs (real estate investment trusts). Excluding the yen, the remaining “approximately 240 trillion yen” remains untouched, he said.

On the other hand, he pointed out that in Japan, individual investors have “2,115 trillion yen” in assets, of which “1,117 trillion yen” remains in cash and deposits. “There is a huge amount of investment resources stuck” in both real estate and personal financial assets, he said. Furthermore, now that the country is promoting a shift from savings to investment and individual investors are becoming more interested in asset building with the introduction of the new NISA, it is important to provide individual investors with attractive real estate investment opportunities. continued.

Regarding real estate investment, J-REITs, which started in 2001, have already grown to a market size of over 20 trillion yen, but he pointed out that portfolios are becoming larger and institutional investors are the focus. Real estate ST converts each individual property, or at most several individual properties, into a financial product, and the company emphasized that it “balances the simplicity of real estate and the simplicity of financial products.”

Furthermore, Real Estate ST points out that for real estate management companies, there is an important strategic significance that goes beyond expanding and diversifying customers and lineups. Real estate ST based on blockchain technology can become a “fresh and detailed real estate investment database” and will advance business innovation and digitalization, he said, adding that he plans to launch a customer portal app in the second half of 2024. “The era has come for fund investment groups to develop smartphone apps,” he said.

Furthermore, in the future, we aim to provide more unique investment targets and investment experiences, such as ST for overseas real estate and utility tokens (UT), which are also known as digital benefits, and create a market of 2.5 trillion yen by 2030. He expressed his enthusiasm and said, “This is not a small market that Kenedix can monopolize.We want to work with a variety of businesses to open up the limitless possibilities of real estate.”

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In the two panel discussions that followed, the first, “What is ST’s growth strategy in 2024? From asset expansion to the emergence of the secondary market,” was attended by Mr. Saito of Progmat, who gave a lecture, and Mr. Daiwa Securities. Mr. Atsushi Itaya, Managing Executive Officer of Group Headquarters and Daiwa Securities, and Mr. Nio Amane, Representative Director and President of Osaka Digital Exchange, took the stage.

The second topic, “Current location of real estate ST, which is driving the ST market, and future prospects for ST,” was presented by Daisuke Miyajima, President and Representative Director of Kenedix, Tomohisa Murakami, Nomura Securities Executive Officer in charge of Investment Banking Products, and CEO of BOOSTRY. Director and CEO Toshinori Sasaki took the stage.

In the second part, we will tell you about the panel discussion.

Part 2: A 10 billion yen deal appears in real estate ST and corporate bond ST, entering a new phase with secondary market and asset expansion[Digital Securities Forum 2023 Event Report, Part 2]

｜Text/Editing: coindesk JAPAN
｜Image: Keisuke Tada