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.