LIFULL and Securitize Japan, a digital securities platform provider, have launched a Security Token Offering (STO) scheme for real estate specific joint ventures.
A provider of housing-related services such as LIFULL HOME’S, a real estate and housing information website, announced a business partnership with Securitize Japan, a digital securities platform provider, to offer a security Token Offering (STO) scheme for real estate specified joint ventures (non-specialized businesses).
A real estate specific joint enterprise is a business that collects investments from investors and acquires and manages physical real estate in accordance with the Real Estate Special Joint Enterprise Act.
The purpose of the alliance is to support and promote the issuance of security tokens for nonprofits by combining LIFULL’s expertise in the application of nonprofits, which has been cultivated through multiple blockchain PoCs, and Securitize’s SaaS, which has a proven track record in issuing security tokens in the U.S., and has a wide range of channels in the real estate industry.
The three main features of this STO scheme for non-businesses are as follows This allows you to add security token issuance and transfer functions to existing real estate crowdfunding sites.
In other words, by linking the issuance of a security token to the issuance of equity stakes in existing real estate crowdfunding sites, the security token can be issued with minimal changes to workflow, etc. Digital completion of the security token transfer is now possible. In other words, relative transfers between investors using the issued security tokens will be recorded in the Ethereum public chain. The destination of the transfer is restricted by smart contracts, and the transfer can be restricted to non-silent partners. 3. implementation will be possible without the need for blockchain development.
The issuance of tokens will be performed using Securitize’s DS protocol, which has a proven track record in the U.S. Issuance operations will be performed using a dedicated SaaS-type application, eliminating the need for complex system development.
We interviewed Mr. Tunahiro Matsuzaka, head of the Blockchain Promotion Group at LIFULL’s president’s office, and Mr. Satoshi Morita, a Securitize Japan Technology Consultant.
-What is your vision for the future of STO Real Estate for LIFULL?
The shift to digital assets based on the ST (Security Token) has just begun, but it is an irreversible trend, and I believe that all real estate will eventually be digitally asserted. However, the trend is irreversible, and we believe that all real estate will eventually be converted to digital assets. We would like to realize a future where real estate, which is essential to people’s lives, is constantly optimized in terms of both utility and assets by converting it to digital assets.
Why do you think real estate and blockchain are a good fit for Securitize?
Mr. Morita said, “Real estate is easy to understand as an asset, but depending on the scheme, it may be difficult to miniaturize it due to the manual work involved, and secondary distribution is still underdeveloped, so I think there are many points where STO can be improved. This is an area that Securitize is focusing on as well, as we have a lot of experience in the US.
The scheme under the non-specialized law №1 introduces a secondary distribution function, which is currently possible, but not well-developed and almost no one is doing it, so it makes it easier for investors to buy and for issuers to create deals with a longer-term. We think it will be a good starting point.
We also hope that LIFULL’s support and Securitize’s technology will provide a catalyst for issuers who have not yet developed an electronic solicitation system to start raising funds via the Internet.
Editor’s Comment
According to the Japan Security Token Association (JSTA) document, “Definition of ST and JSTA Coverage,” security tokens are 1. tokenized securities representation rights, 2. electronic record transfer rights, 3. those excluded from electronic record transfer rights by internal cabinet order, 4. real estate specific The tokens are classified into five categories: 1. tokenized equity interests under the Joint Venture Act; 5. tokenized rights to assets other than the above.
Incidentally, of the security tokens, 1 to 3 are under the jurisdiction of the FSA, and 4 are under the jurisdiction of the Ministry of Land Infrastructure, and Transport.
In other words, this security token scheme was created with legislation that is in line with the characteristics of real estate as an asset.
Considering the current legislation, the initiatives taken by LIFULL and Securitize are considered to be very progressive.
Until now, when non-specialized companies invested in real estate, they had to wait for the redemption of rights due to the time-consuming process of ownership transfer.
However, the process of real estate investment will be made easier with the ST system, which will broaden the base of people participating in the investment process. This is because ordinary investors, who have been participating in real estate crowdfunding, will be able to participate in STO.
images:（dalebor・tampatra）
