MUFG's Trust Division Plans to Convert $681 Million Osaka Tower into Blockchain Assets for Individual Investors
MUFG Trust, a subsidiary of Mitsubishi UFJ Financial Group (MUFG), has made a strategic move to compete in Japan's emerging tokenized real estate market. This move creates competitive dynamics with existing market players, including Mitsui Digital Asset Management.
The bank's decision positions MUFG Trust as a competitor in this burgeoning sector. MUFG spun out Progmat as a separate venture, retaining a 42% stake. Interestingly, MUFG Trust and Mitsui Digital Asset Management maintain connections through Progmat, MUFG's digital securities platform, despite the apparent competition.
Mitsui Digital Asset Management, active in real estate tokenization and aiming to attract retail investors via the Alterna platform, has completed 14 of its 16 total issuances through the Alterna platform, targeting retail investors directly. The Japanese digital securities market has seen 63 digital securities issuances totalling 194 billion yen ($1.3 billion) since 2021, with real estate tokens accounting for approximately 80% of issuances.
Real estate tokens offer a unique opportunity for fractional ownership of high-value real estate assets to retail investors. MUFG Trust plans to tokenize a real estate asset and offer it to retail investors through digital securities. The bank also intends to sell portions to life insurers as a private real estate investment trust (REIT).
Meanwhile, Mitsui Digital Asset Management's Alterna platform has been particularly active in the Japanese tokenized real estate market. The name of the head of Mitsui Digital Asset Management is not explicitly given in the available search results. Mitsui recently signed an agreement to continue using the Progmat platform for most of its security token operations.
Japan's digital securities market is growing, with digital bonds comprising the remaining portion of issuances. Notably, digital bonds dominate European tokenization efforts, but real estate tokens lead Japanese issuances. The Osaka Digital Exchange's START marketplace lists six real estate tokens with a modest monthly trading volume of 23 million yen ($157,000).
MUFG Trust's entry into the tokenized real estate market adds another layer of competition to an already vibrant sector. As the market continues to grow, it will be interesting to see how these players navigate the competitive landscape and attract investors.
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