San-in Godo Bank, a regional lender headquartered in Matsue that serves the San'in region of western Japan, has joined forces with IT services firm NTT Data and digital-securities infrastructure provider Securitize Japan, the local arm of the US-based digital asset firm Securitize, to develop a platform for tokenized securities, starting with research into regional fundraising through on-chain bond issuance. The three parties will first examine whether the regional bank can issue its own bond-type security tokens and sell them directly to investors, with a debut targeted within fiscal 2026.

The initial issuance is expected to be a self-placed offering of several hundred million yen, with investment units starting from just tens of thousands of yen and aimed at individual investors. If completed, it would mark the first tokenized bond issuance by a Japanese regional bank, and the bank intends to then extend the infrastructure to its corporate clients and other SMEs in the region. Tokenized securities of this kind fall under a legal framework Japan established through 2019 amendments to its financial instruments law, which created rules for electronically recorded transferable rights and paved the way for licensed digital-securities offerings.

Digital corporate bonds digitize the traditional issuance process and record ownership on a distributed ledger, streamlining holder management and administrative procedures. This structure is well suited to small-scale retail distribution: conventional bonds placed through securities firms typically require issuance totals of at least one billion yen with minimum units of one million yen, whereas tokenized bonds can be issued at several hundred million yen with units priced in the low tens of thousands.

The initiative also aligns with official policy. Tokyo's growth strategy for the financial sector, finalized in late July, explicitly stated that support for fundraising through capital markets is essential for the growth of core regional companies, and the Financial Services Agency is expected to encourage similar efforts by other regional lenders. San-in Godo estimates demand from roughly ten client companies at a combined tens of billions of yen annually, with individual issuances of several hundred million to about one billion yen — a segment comfortably below the scale of conventional bond issues.

For retail investors, a key convenience is the ability to purchase and redeem the bonds through an existing bank account without opening a securities account. Issuers, in turn, gain real-time visibility into holder identities, enabling them to attach perks such as merchandise discounts or event access to bondholders — a model anticipated for locally based sports teams seeking to engage fans through tokenized instruments.

New Platform to Serve SMEs and Municipalities, Riding a Broader Trend

Beyond the bank's own issuance, the consortium plans to integrate Securitize's digital securities platform with NTT Data's Chigin Kyodo Center, a shared core banking system used by 13 regional banks, eventually allowing other lenders in the network to offer tokenized bonds. The infrastructure is also intended to support municipal bonds once regulatory changes permit digital local government bond issuance from April 2027, a move aimed at broadening an investor base currently dominated by elderly asset holders.

San-in Godo's effort reflects a widening trend in Japan of direct corporate bond issuance without securities firm intermediation. In August, Toyota Financial Services announced a one-billion-yen digital bond targeted at individuals, with minimum units of 100,000 yen and a reward of Toyota group electronic money on top of the standard coupon, issued using infrastructure from BOOSTRY, a Tokyo-based platform backed by Nomura Holdings. BOOSTRY, which also powers the Toyota issuance, is expanding its digital bond services to large corporations with strong brands and captive economic ecosystems, including retail, payments, and transportation companies.

For SMEs previously deterred by underwriting fees and administrative burdens, tokenized issuance could open a materially cheaper and more flexible funding channel — and if the regional bank shared-center model proves viable, Japan's local lending landscape could see a wave of similar platforms follow.

Source: Metaverse Post