Beyond Issuance: The Next Era of Tokenized Markets

Transcript

[music] Hi. Um, this is AG. Um, thank you for your time. Um, so I want to cover very quickly about the RWA tokenization space globally and also in Japan as well. Um, and a bit about Sorry, I'm too a little bit about my background. I am a Japanese but educated in the US. Um took a first job on the Wall Street, Mel Lynch and worked in New York for four years and um spent much of

a ear part of my career in investment banking. So I'm from a trfy guy and um about seven years ago converted into the onchain space. talk about security. Securize um you may or may not know securityize. Securityize is a leading global RWA tokenization platform. Um about five billion five billion US dollars aum. Uh we are SEC FINRA registered broker dealer and um registered transfer agent as well. And we have many um leading asset global leading asset managers as clients like

Black Rockck, Apollo, Vanic, KKR and stuff like that and recently listed on New York Stock Exchange. We also have um in the left side bottom um many Japanese investors in the parent company as well. security Japan. Um the tokenization space in Japan is very different in Japan from US. Uh and I touch on that later. Uh but we actually do have uh have done a pretty diverse type of deals and diverse clients as well like here um for from companies like Marui Credit Son

and Sumitomoi Trust Bank and Sony Bank and real estate space as well and we also have lots of um financial institutions partners too. So we are actually quite active. We've been here for seven years. Um so um I I think we're doing quite well here in Japan too. So global trend here's a sort of big picture thing RWA tokens about 32 billion US dollars right now. Um this is about one10enth of a stable coin which is about $300 billion and crypto asset um much broader space

is about eight times large as a stable coins. So RW tokens is almost like 100s of crypto asset space right now. So it's very small but if you see the graph um you can see that in the past three years that the growth has been phenomenal. Um it's almost like you know over 100% 200% growth each year. So we are growing very fast and we are catching up with stable coin and cryp crypto asset.

The driver for that is what people call tokenized treasuries. Um in Japan in the press as well uh it's called also tokenized mmf money market fund. It's about 14.7 billion US dollars right now. It represent about half of the market. Sorry it says 366 but it's about 46%. And um this also see a phenomenal growth as well. But it grew after right after the launch of our uh tokenized treasury funds with the Black Rockck which is

called Bidd about two and a half years ago um pre-bidding grown like 20 times. So um it's a m major driver for the growth of the tokenized RWA tokenization market. So what's happening? Why why is that growing right now? A couple of factors of course bidle is one thing and that is um characterized as entry of global asset managers and institutions.

I'm going to go go into that a little bit later and investor trends as well. And then regulatory developments as you may well aware uh since the recent Trump administration's act actions um basically the regulatory uh environment is quite supported to the RWA tokenization effort and defy integration and equity tokenization as well. These are sort of key factors driving the growth in recent years.

Let's move on to the global asset managers and institutions. Um the first major entry of global uh asset manager was KKR 2022 almost four years ago and then other major asset managers entered into the market. Hamilton Lane, Black Rock, Apollo, Vanek and BNY Melon. Um, and some of them actually launched more than one funds in tokenized form. Um, so these guys you may know are a really core of trfy um business sectors.

But these guys also are aware that tokenization is an important strategic move and that's why that they have started to build the tokenization business already like four years ago and then as I have touched on black rocks entry in bidd um the impact in the market is not only the growth and the size of the market but the bidd was brought in as a pro fully onchain structure the one of the first um the first of a kind by major financial institutions and global asset

managers which means that investors can purchase or redeem um bid fund it's money market fund essentially uh without going through traditional financial structure like bank wire transfer and stuff like that but they can buy and redeem um on the um stable coin. So it's a fully onchain structure um that was different from the previous um [clears throat] tokenized funds and recently accelerating the uh trend the major players such as blood such as black rockck JP Morgan and Fidelity launching a second funds. So um the um this this segment of um global asset

managers all of them are basically try players are actually growing very fast. So that's one of the reason that is supporting the u phenomenal growth of the RWA tokenization recently investor trends fractionalization was one of a major theme on the first sort of phase of this growth but then as I mentioned the fully onchain structure and which really leads into potential defy integration is the next phase uh driver for the growth and that's Why the investors actually more attracted into this space?

Initially only accredited investors but be brought in onchain natives such as crypto exchanges, stable coin issuers, DAO and crypto wealthy individuals are now buying the yield um generating tokenized assets like Bidd and other higher yield generating assets as well. There there there are actually many projections but the more aggressive one is 30 trillion US dollars in seven years or eight years and 19 trillion US dollars by BCG. So this market is going to be really big in the next seven eight years and also you can see on the right

side graph that it actually come across with pretty much all types of assets u from if it's not really large but funds fixed income equities and real estate and other types of alternatives. So pretty much everything is going to be tokenized in next seven eight years. That's how most of the um [clears throat] institutions and consulting firms are actually projecting. So we're actually right there. The opportunities are there as well. So that's how the tokenization real RWA tokenization markets really are working right now globally.

Turning into Japan, the um scene is actually quite different. As mentioned, we have done diverse deals, diverse with diverse clients as well. So, Japan is actually outside the US uh one of the most active tokenization market too. Um many corporates, many financial institutions are actually an active participant in the market. What's different here is all of the these deals are done on a private chain and not a public blockchain.

There are no reasons, but um that's where it is. It's changing and we've been trying to sort of push for change as well, but for the past seven years, uh it's been done on the private chain, but there are some interesting efforts being done too. I want to touch on Marui. Uh you may know Marui which is a major retailer and also fintech company primarily is through credit card called Apple card. They have done self-offered bond deal u which is self-offered meaning that they issue debt and do financing but without broker dealers uh underwriting. They

sell the bonds directly to the investors and they sold the bonds to EPOS card members and the good thing is that to the company is the interest payment is done in a combination of cash and EOS point. Therefore the cash burn for the company is actually smaller for the investor they get points and the total EOS is actually higher. So both sides actually get some you know good stuff. There's also an element of marketing um by directly company directly engaging the investor company can actually use this channel as a marketing channel so that the um buyer

or investor who are actually also the customer of the company feel closer to the company's effort and more engaged and supportive to the company's effort too which is actually good for the company's business too. This was done also with crediton and PPI and PPIH is a parent company of donkey hotel and this is actually spreading too and Marie has done this deal five five times already and they sort of continue doing that every year going forward um we actually focus on few things in Japan catch up with global standard as mentioned public public

blockchain is one thing we need to actually move into of course on a fully onchain model. The other thing is to broaden the security token base. We go we go regional and we bring Japanese issuer to a global markets too and equity tokenization. Equity tokenization is actually actually quite interesting which is going to change the relationship between the company and equity holder primarily through pretty much everything. dividend payment can be done more frequently and shareholder benefits can be delivered uh more frequently and easily and marketing too as you have seen in the Maria's case too.

I want to introduce a few things uh which is actually done recently to move ourselves forward through this direction toward the global standards. Simitosi trust bank has announced a [clears throat] um establishment of tokenized foreign investment trust uh which is basically similar to um blackbox bele um invest in um [clears throat] short-term US treasuries and build on the power public chain. This is going to allow fully onchain stuff. Instant stable coin settlement, automated interest via smart contracts and 20 247 uh crossber trading. This is the first

um serious effort of Japanese major Japanese institutions in the public chain and this is really the major step forward um in this market. So I'm very excited to actually see this and being able to share this with you. Then going regional um you might have noticed that most of the names on the on the slide was actually major corporations headquartered in Tokyo or Osaka. So these are really for so far big big guys but we are actually trying to make the global and cutting edge global technologies available for uh at

the regional level as well and we are actually uh very proud to be um able to uh announce the um deal with signing godo bank which is in the Shimanet uh prefecture. uh you might have been there before. Um it's it's basically pretty simple to bring bring the um tokenization model which I have introduced as like a Marie and others uh to the regional level so that regional companies, banks, municipalities and projects can actually use these technologies uh more easily and more economically as well. and San Gordo's um initiative is the first on

the regional level and this is going we have a plan with um entity data too uh to work together to make this platform available throughout Japan as well. Um little bit on the wars on Ethereum. Um key drivers for institutional tokenization.

Actually there are many of them but to name a few security smart contracts developer ecosystem and com composability. [clears throat] These are very important as you may know Ethereum has everything on this. Of course, everyone probably claim they may have one, but has a pretty good and base um [clears throat] good base for all of these. Uh which is why that this is supported as a sort of a foundational network for institutional tokenization.

Um [clears throat] and of course you may you may have more better statistics but Isarium proven to be a market leader um so far in RWA tokenization 16 billion dollars um on Ethereum which is about 45% of the total global market global RWA market and the size is about four 4.7 times or five times larger than the next large network. So it basically so far dominates you can say dominates the market about 2.5K 200 plus RWA assets and 270,000K

uh two to 270K holders as well. Um so you you can say that Ethereum built the market for institutional tokenization and remains as a key player. Um I'm sure a bit on securityize security's footprint on Ethereum is also pretty strong. Um security is actually position is open to multi-chain and we have um we do support over 20 uh 20 plus uh chains as well but as a result so far like like nine years of history our DS protocol which is the basis of

our tokenization uh smart contracts [clears throat] started with Ethereum back like nine years ago and also blacks bidd22 sorry 24 was first launched on the ethereum as well. So this is proven this is really proving that Ethereum is really a used and working we are working together as a front and front and cutting edge uh development of the market too. We now have 16 assets on Ethereum 2 including Bidd with and al also with other institutions too and um [clears throat] treasuries and private

credit and structured credit and venture capital all types of assets as well in Syria. So we think this is really the basis for the um [clears throat] institutional tokenization and I think it's going to be remain to be um the same as well going forward. Well I have 50 seconds to go but my presentations is done. Thank you for listening. [applause] [music]