On - Chain Capital Markets

Astar
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Hi guys, I want to open this thread with only educational intention, right now with the new regulations on cryptocurrencies including stablecoins and DeFi, driven mostly by the US and Europe, the possibility of big players in traditional finance entering the blockchain space is emerging.

I have prepared an article (which I share below), giving a vision of what a regulatory opening of cryptocurrencies in Asia (South Korea and Japan) could mean, and how this easing could mean the migration to web3 of financial products that for years have been under the control of traditional banking, such as stocks, bonds, lending or institutional borrowing.

Based on the above, the dApps in Astar and Soneium should at any moment turn their gaze to this new narrative that can attract liquidity to their ecosystems never seen before.

Insights:

  • Still lacking the development and approval of applicable regulations in countries like Japan and South Korea, but they are already working on it, maybe they will come out in 2026.

  • Web3 projects wishing to adapt their dApps to offer these products must comply with all legal requirements.

  • Users may be restricted from trading on their own, however, they can join investment funds and can participate through them.

I hope we can build a pleasant and professional conversation through this thread!

Yours sincerely. Van

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As a Japanese agent, I will speak from the perspective of the domestic market.
In Japan, the security token (ST) market is gradually expanding, but it is still in an early stage of development.
There have been few notable changes regarding crypto assets, and discussions are expected to continue this year, with legislative or regulatory changes likely to take effect next year.
The primary focus is on tax reform and ETF-related topics, so further debate is needed before meaningful business applications can take shape.

The most prominent ST-related projects in Japan are Progmat and ibet for Fin, both of which are involved in the issuance of real estate-backed tokens and stablecoins.
On the other hand, despite growing global interest in tokenized stocks, there are currently no notable cases or discussions on this topic within Japan—likely due to regulatory hurdles.

Although the ST market is still small in scale, it currently includes a variety of asset classes, such as:

  • Real estate

  • Corporate bonds

  • Investment trusts

  • Carbon offsets

These are all traditional asset types, and the market is not yet in a position to be considered particularly innovative.

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I really appreciate your comment as a Japanese agent; your point of view is really important.

I have read everything you have said, I would like to add the following to clarify what we are talking about, for readers joining this conversation, there is a big difference between STOs and “utility tokens.”

First of all, although BTC and ETH utility tokens are recognized in Japan, they are not part of the institutional DeFi system. While it is true that legislation allows the creation of STOs for companies (e.g., real estate), it is a very closed market that suffers from centralization.

If there were an institutional opening of web3 in Japan, many companies could use utility tokens to carry out different operations in DeFi (to do so, they would need to exchange fiat money for stablecoins). Decentralized cryptocurrencies have this advantage, i.e., the ability to create tokenized shares, earn returns, and use those returns for on-chain loans.

Another important difference is that STOs have very low trading volume compared to “Utility” tokens, which is a consequence of their centralization (it is not entirely wrong to copy some of this centralization; I will explain this later).

In summary, on-chain capital markets consist of companies being able to access DeFi, bringing their traditional products to web3, where the rules of decentralization set the tone for the new era of universal finance.

Thank you mate! I’m very excited to talk about this at the highest level.

PS: STO - Security Tokens

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Hey @Vangardem, great work on this piece! :clap: I really enjoyed the depth of your analysis on how South Korea and Japan could shape the next wave of institutional DeFi adoption. It’s the kind of research we need more of in the community, so please keep these coming!

Reading your article got me thinking about a few questions:

  1. In your view, which specific Astar or Soneium projects are currently best positioned to capture institutional interest once the regulations in Japan and South Korea are fully in place?
  2. How do you see the timeline for “tokenized traditional products” adoption in Asia compared to regions like the US or Europe?
  3. You mentioned the idea of “Decentralized Large Capitals”, do you think this will require entirely new dApps built from scratch, or can existing DeFi platforms adapt to serve this segment?
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Ah, my apologies. For some reason, I assumed the main topic was tokenized assets. But I see now that the focus is on DeFi and stablecoins.

In Japan, stablecoins are clearly distinguished from crypto assets and are defined as “electronic payment instruments.” Because of this, most exchanges are not licensed to handle stablecoins, and only one exchange is currently authorized to offer USDC. As for DAI, since it is a crypto asset–backed stablecoin, it is classified as a crypto asset and can legally be handled by exchanges. However, even DAI is only available on one exchange at the moment. Although the legal framework has been established, the adoption of stablecoins in Japan is still expected to take considerable time.

One of the major obstacles is the lack of profitability in operating yen-denominated stablecoins. While interest rates in Japan have recently begun to rise, government bond yields remain low, making yen stablecoins far less attractive compared to dollar-backed ones. It’s hard to predict how this might change in the future. Additionally, under the current legal framework, it’s extremely difficult for private companies to issue stablecoins, leaving banks as the only realistic issuers. This is another factor slowing down progress.

When it comes to DeFi, the situation is even more challenging. There is virtually no public or regulatory discourse on DeFi in Japan. If a domestic company were to offer DeFi services to Japanese users, it would likely fall under existing financial regulations, which makes such business models almost impossible to operate.

While some proof-of-concept experiments are being conducted, the policy focus in Japan is still heavily tilted toward tax-related issues. At present, it is practically unfeasible for a Japanese company to launch a business involving stablecoins or DeFi.

That said, large corporations like Sony, which have overseas subsidiaries, may still be able to enter the space in some form. Sony also operates Sony Bank, which means they should technically be capable of issuing a stablecoin. While it’s unlikely they would offer DeFi services directly, it’s conceivable that Sony-issued stablecoins could be used within DeFi ecosystems.

I believe Sony is aiming to bring various types of assets onto Soneium, and execute many functions—including payments—entirely on-chain.

In that respect, Soneium could hold a significant strategic advantage.

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Thank you @you425 for sharing such a clear and objective overview of the current situation in Japan. As someone who doesn’t have deep knowledge of the local regulatory environment, I really appreciate your insight—it helps everyone in this discussion better understand the real starting point behind Japan’s immense, yet still mostly untapped, potential in Web3 and DeFi.

Reading your message, it becomes evident how early we still are in this journey—especially when it comes to key components like stablecoins, tokenized assets, and DeFi access. That said, the fact that a giant like Sony is gradually stepping into the space could truly act as a catalyst. With its scale and influence, Sony might be able not only to lead by example, but also to accelerate a regulatory environment that becomes more favorable to innovation—especially around areas like private stablecoin issuance, asset tokenization, and institutional-grade DeFi.

I personally believe that, in every major technological shift throughout history, you always need someone to take the first step. And if one of Japan’s (and the world’s) largest corporations is now actively exploring on-chain systems and building a L2 like Soneium, it’s a real signal that something is starting to move—even in a context that might still seem rigid or slow on the surface.

Thanks again @Vangardem for starting such an insightful and educational thread. It’s conversations like this that help us all grow in perspective.

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I believe that anyone who already has Yield Farming Pools or somehow has currency pairs has a considerable advantage. They would only have to comply with established laws and the terms of a possible agreement with a TradFi company that wants to bring its products to blockchain. I will complete this answer when I comment on the third question you asked me.

From what I have been able to research, no laws will be passed to allow asset tokenization to be carried out in a decentralized manner until 2026, but I think they are on the right track. After all, Asia has one of the best economies in the world, and they won’t want to miss out on this opportunity.

I believe there are already several dApps from Astar and Soneium that could adapt to the new DeFi paradigm, since in principle, traditional financial products will be traded using the same infrastructure that DeFi products have been traded with. For example, for some time now, we’ve had in the blockchain ecosystem: pools for Yield Farming, pools for loans backed by collateral, which ultimately would make it easier to conceptualize the financial mechanics for these TradFi products. I’ll provide an example for that: Suppose SoneFi has an “Earn” section in its dApp, and imagine that a traditional fund wants to open a market on SoneFi:

1. Both would have to comply with regulatory guidelines before starting trading.

2. Once the legal requirements are met, the TradFi company could tokenize its shares and establish a pair against any stablecoin or altcoin (BTC - ETH) in the “Earn” section of SoneFi. It’s important to highlight that they must reach an agreement to establish the Yield strategy. They might decide that part of the “Revenue” is used as collateral for loans, Eureka! So SoneFi could also have a “Lend” section; it would be organic growth if they decide so, the point is that they can agree on what best suits their current economic situation.

3. All commercial actions must be backed by intrinsic liquidity, as in any financial system; this liquidity can be provided by TradFi, ensuring its depth to guarantee the success of the products they bring to blockchain.

4. Even SoneFi could have its own Stablecoin and create pairs against it.

The possibilities are endless; then it will depend on improving or adapting the smart contracts for each case, but in principle, we already have the foundations established to begin this journey.

Thanks for your comment, Carlos.

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Thanks, I didn’t have this information written down! Great!

I completely agree that Sony, through Soneium, can save some actions with regard to Japanese laws due to its transnational nature, and some of its dApps can take on the challenge. However, it would be a shame if Japan did not adapt its full economic potential to the new financial paradigm, given that its economy is strong and thriving.

I am delighted that you have clarified the legal situation regarding DeFi in Japan. I learned a lot, and this is one of the reasons why I started this thread. I want to continue learning about this on a large scale.

Thanks! @you425

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In fact, Sony with Soneium could be the big player if Japan decides to relax its laws on blockchain and the management of tokenized assets. Its influence on the global economic framework could be the first step toward establishing a strong DeFi space.

Great point, Simon.

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@Vangardem, your vision is fascinating and very detailed. Thank you for your answers!

A key question comes to mind: how do you see the process of tokenizing traditional shares in terms of custody and compliance? For example, who would hold the underlying shares when they are tokenized on SoneFi? And have you considered how we would handle shareholder voting rights and dividends in this hybrid model? This could be a crucial differentiator compared to other platforms.

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Traditional investment funds generally have commercial papers backed by various assets, most of which use USD, GOLD, etc. These commercial papers would be exchanged 1:1 for their tokenized version, or they can serve as collateral for the token or tokenized stock
 They can also inject USD from their revenues (this is just an example) as a strategy to collateralize their tokenized stocks.

However, one of the strategies that is on the rise is to exchange part of their shares or returns for stablecoins at a 1:1 ratio, and what they do is delegate that capital to a management platform or capital allocator so that a platform or dApp keeps them under the figure of Assets Under Management (AUM). To do this, they must comply with all the requirements of the laws for managing third-party assets. There are already platforms that do this today and use that capital in exchange for an APY, and with it they carry out various DeFi operations. It is a win-win situation if you know how to apply the right strategy.

As for the underlying shares, they are transformed into tokens—Stablecoins or Alts, for example—and it depends on whether the company continues to manage them or delegates them.

Custody will depend on whether they are tokenized or not.

But in the end, it will be a smart contract “the custodian” in any case if we are talking about tokenization, and likewise, the collateral can be distributed both physically and on web3, to put it in simpler terms, and this is the turning point to your question, the governance system would be ‘hybrid’ and you have hit the nail on the head, we would be talking about a “SubDao” model, decisions would be made from outside and inside (off-chain and on-chain), which would be the fairest approach to governance because it mitigates the centralization of the DAO, and the physical counterpart will be able to make decisions about the assets that also belong to it.

I have an article prepared to delve deeper into this model, and then I will write one about the hybrid governance system.

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Thank you for your detailed response, you’ve given me a much clearer view of the matter. I hope the conversation can develop much further :+1:

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Thank you, Carlos. The inclusion of Morpho Labs in Soneium is a big step forward. Morpho is listed in the article I promised to share. I hope you can take a look at it. Here is the link:

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Morpho is part of a large DeFi ecosystem that is flourishing, and I am very excited that it is coming to Soneium! It’s simply incredible!

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Finally, Soneium will be a great catalyst for Super DeFi dApps to come to Soneium! A clear example of this happened today with the arrival of Morpho. Well done, Simon! I love these kinds of conversations!

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I have been paying close attention to tokenized assets (RWA) for quite some time and have high expectations for their potential. However, the biggest bottleneck lies in the management of the underlying assets.

Even if we aim to handle assets in a decentralized manner on a distributed network, there will inevitably be a trust dependency on the entity managing the underlying assets (as full on-chain implementation is impossible). If the sector expands without fully addressing this issue, it could eventually lead to a loss of trust, triggering a shock in the market.

RWAs are quite similar to ETPs. In traditional finance, such instruments are subject to strict regulations, but when they become RWAs, the level of regulatory oversight is often much lower. This is a point of concern for me.

For now, I believe the more practical approach is for regulated entities to manage and issue the assets centrally, while leveraging the blockchain to ensure transparency and transactional efficiency. Depending on the type of asset, it will likely become necessary to involve independent third-party auditors on a regular basis to issue asset verification reports. This is similar to how fiat-backed stablecoins operate — in fact, this type essentially represents tokenized dollars, and thus is a form of RWA.

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In fact yes, they are a form of RWA as FIAT converted to Stablecoin in and of itself is bringing TradFi to blockchain.

The difference is in what RWA without DeFi is inefficient:

1. RWA has no depth of liquidity on its own.

2. RWA needs the DeFi ecosystem to expand its products.

As for governance as I said above the best is the SubDao figure both TradFi and DeFi will be more secure this way.

And there are already qualified auditors who are in charge of reviewing smart contracts and operations for this kind of projects.

In the case of Untitled Bank, they should now focus on seeking the greatest possible liquidity and increasing their depth, so that they can develop their products while ensuring that they are collateralized.

For its portfolio, it could buy stocks, hold centralized fiat, or stablecoins in a vault, thus backing its operations.

Imagine that part of Untitled’s portfolio consists of Blackrock BUILD stocks.

The fact is that this symbiosis of DeFi + RWA is what makes this new narrative possible.

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Good points from all of you — it’s clear that regulatory clarity in Japan and South Korea could be a turning point for bringing traditional finance into web3.

Two big takeaways so far:

  1. STOs are regulated and centralized, while utility tokens offer more liquidity and DeFi integration.

  2. Regulations will take time, so products need to be compliant from the start.

One extra angle is programmable compliance — smart contracts with built-in rules like wallet verification, jurisdiction checks, and automated reporting. This could let tokenized stocks or bonds on Astar/Soneium stay compliant while still working with DeFi lending and trading.

Another point worth adding: interoperability between chains. If Japan or South Korea launches regulated token markets, liquidity will grow faster if those assets can move across ecosystems (e.g., Ethereum, Polkadot, Cosmos) without losing compliance status. This could make Astar and Soneium key hubs for cross-border, regulated asset flows.

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Hi guys! This is my last article in my DeFi series: https://x.com/Eu1583/status/1960734702848885182

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I’m closely following the content you’ve written about these topics, my friend. It’s a subject that interests me too. Many people might say that legal requirements are still incomplete in many countries at this stage, but this is not something we need to wait for. The legal requirements will inevitably be completed one day, and when that day comes, our product will already be ready with the infrastructure support offered by Startale.

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