【ST Forefront】Asset Management Starts Without a Securities Account from a Credit Card Company: A New Door Opened by Credit Saison and Mizuho Trust | CoinDesk JAPAN

On April 24, major credit card company Credit Saison, Mizuho Trust & Banking of the Mizuho Group, real estate investment management firm Tosei Asset Advisors, and digital securities platform Securitize Japan announced the issuance of a real estate-type security token (ST) "Saison's Smart Real Estate Investment" aimed at Saison Card and UC Card members. This marks the first instance of a real estate-type ST issued by a domestic credit card company.

This product targets six rental apartment properties in Tokyo, planning to raise a total of 1 billion yen with 20,000 units priced at 50,000 yen each. Features include the ability to invest using the永久不滅ポイント accumulated from Saison Card and a "self募集型" scheme that does not go through a securities company.

On May 12, when the募集 started, CoinDesk JAPAN conducted interviews with Mr. Yuichi Hidaka from the Structured Finance Department of Credit Saison, who led this project, and Mr. Yuki Kuroda from the Trust Sales Team of Mizuho Trust Bank's Real Estate Trust Department. They discussed the design aims to attract individual investors and the impact on the future ST market.

Consideration for Beginner Investors, Rising Interest in Personal Investment

──The background that led to this collaboration and the points emphasized in the scheme development.

Mr. Hidaka: Our company is generally known as a credit card company, but our finance business, centered around real estate investment loans, is also an important pillar of our revenue. With the increasing interest in personal investment following last year's "New NISA (Small Investment Tax Exemption System) inaugural year," we wanted our card members to feel closer to investment opportunities by leveraging the real estate-related assets we hold.

This concept was launched about three years ago, and we approached Mizuho Trust Bank about a year ago. We have been exploring whether we can leverage the customer base built through our credit card business to provide new asset management options for individuals.

Mr. Kuroda: Although there were many challenges as this is a new system, I empathized with the strong will of Credit Saison and decided to collaborate. I believe this initiative will serve as an important model for the Mizuho Group in expanding the real estate ST sector. Additionally, it is an initiative that can be expected to further grow the card business at Credit Saison and create branding effects, and as a bank focusing on consulting, we also wanted to provide support.

Traditional real estate ST had a strong aspect as an alternative to REITs (Real Estate Investment Trusts), but I felt that Credy Saison's concept has the potential to play a public role that can serve as a reference for a wide range of companies considering the use of ST in their business.

──What kind of customer base are you aiming to develop?

Mr. Hidaka: Until now, our company has had contact with customers through card payments and loans, but we believe that through this ST product, we can establish a broader "surface" relationship. This product adopts a "preferred subordinate structure" that can provide a certain sense of security even for novice investors and those who have concerns about risks.

Additionally, this time we aim to build relationships that delve deeper into customers' investment tendencies and interest in asset formation, not just limited to traditional payment and living fund needs, as our company will handle sales and promotion directly without going through a securities company.

Mr. Kuroda: The scheme in which Credit Saison acts as the issuer provides elements that give investors peace of mind, such as the company's brand, creditworthiness, and risk mitigation design through the underwriting of the subordinated portion. This is expected to be approachable not only for experienced investors but also for beginners, leading to the acquisition of a new demographic.

──What are the benefits for investors from the priority-subordinate structure?

Mr. Hidaka: Specifically, the structure is such that the preferred investors can receive dividends preferentially. Furthermore, in the event of losses due to factors such as a decline in real estate prices, the losses are first charged to our investment as subordinated investors, which makes it difficult for the principal of preferred investors to be impaired.

The fact that our company is taking on the subordinated portion is, in other words, a declaration that "we ourselves are also a product worth investing in." It shows our attitude of not just selling and ending there, but rather sharing risks with investors and cultivating value together.

An Attention-Grabbing Mechanism Without a Brokerage

──The recruitment started just today (May 12). What is the current customer response?

Mr. Hidaka: From the account registration period, which runs from April 24 to May 11, there has been a wide range of interest across generations. The ease of being able to invest small amounts and the ability to utilize permanent points have been particularly well-received, and I feel that the aim of "lowering the barriers to investment" has been communicated.

! Permanent immortal points are pervasive among cardholders, The fact that it can be used for asset management has led to this response. To apply, you need to register an account in advance, but the number of registered users has already exceeded a few thousand. The minimum investment amount, which is 50,000 yen per unit and can be applied for from 2 units, was also set to encourage more participation.

──This is the 4th project for Mizuho Trust Bank. I would like to know about the insights gained from the past 3 cases and the objectives included in this one.

Mr. Kuroda: Through the past three formations, understanding within the company has progressed, and know-how is gradually being accumulated on-site. This time, it was a self-offering type where Credit Saison sells it themselves, which was a different challenge from the conventional approach, but we cleared each institutional and practical issue to realize the scheme.

In the future, we hope to see an increase in inquiries from other businesses wanting to "issue STs leveraging their own brands and customer bases." This case has the potential to lead to the expansion of new business areas for our bank.

The response from the industry has been significant. Securities companies and asset management firms have expressed their surprise at the speed of the scheme and the novelty of its structure. It is believed that more individuals engaging with ST will also contribute to the overall expansion of the market.

This initiative embodies the original concept of ST, which is "to connect issuers and investors directly." For businesses, it will not only be a simple fundraising method but will also lead to new developments such as fan marketing and enhancing corporate value.

The Optimal Platform for Self-募集型

──The reason for choosing based on Securitize Japan.

Mr. Hidaka: There are primarily three reasons. The first is that there is a wealth of experience in ST issuance centered around the United States, holding a high global share. The second point is the track record of responding to self-funding types. For example, in the case of the digital corporate bond issuance by the Marui Group, the issuer itself was selling and appealing to investors, which had a high affinity with the scheme we aim for.

Related: Marui to Issue Token Bonds - Nomura as FA, the Foundation is Securitization

The third aspect is reliability in risk management and system security. Recently, incidents of securities account hijacking have become a social issue, but in addition to our internal verification, we confirmed third-party reports and determined that we can feel secure in terms of management systems and security.

Mr. Kuroda: In a scheme that does not involve a securities company, it is necessary for the issuing party to handle tasks such as dividend payments and the preparation of tax documents for investors, so whether there is a reliable foundation to carry out these practical tasks was an important point in the selection process. We have also requested additional development for some functions, such as the preparation of tax declaration reports, from Securitise Japan, and they have responded accordingly.

Business Flow Built from Scratch, from KYC to Dividends

──If we don't go through a securities company, who will take on KYC (Know Your Customer) and credit assessment?

Mr. Hidaka: This time, since it is a self-offered type, the confirmation of investor suitability in sales and solicitation is undertaken by our company, which is the offering entity.

〈The Mechanism of Saison's Smart Real Estate Investment〉Mr. Kuroda: Our bank is responsible for the basic checks regarding investors. The investors acquire trust beneficiary rights, and the parties to the trust contract are our bank and the investors. Therefore, attribute checks such as anti-social checks and confirmation of tax residency are conducted proactively by our bank in a commissioned form. These confirmation tasks are carried out on the platform itself, making them less visible from the outside, but the division of roles is organized in this manner.

──What was the most challenging aspect of building the system?

Mr. Kuroda: The biggest challenge was building a business flow in the absence of a securities company. It took the most time to sort out who was responsible for what and what kind of responsibilities and commissions would be carried out. "Entry operations" such as investor identity verification and "investment operations" such as dividend payments have been the core parts of securities firms, and it was difficult to set up an alternative system.

Mr. Hidaka: As a company, we have limited experience in investment-related operations such as dividend payments, and in the initial stages, we were truly groping in the dark. While receiving support from Mizuho Trust Bank, we accumulated knowledge and, in some cases, obtained advice from external securities firms and experienced lawyers, allowing us to proceed with preparations while ensuring that legal requirements were met.

Realizing "Financial Democratization" through Real Estate ST

──The ST market is expected to expand domestically, with forecasts predicting an issuance scale of around 180 billion yen for the fiscal year 2025. What are your thoughts on the challenges in terms of systems and practical aspects?

Mr. Kuroda: The expansion of the ST market is a common expectation across the industry, and the improvement of tax systems and regulations is steadily progressing. The challenge moving forward lies in how to translate institutional reforms into practical applications and to create a system that stakeholders can actually find easy to use.

Through this experience with the self-recruitment scheme, we may consider product design with an eye towards listing on the Osaka Digital Exchange (ODX). Moreover, this time, by combining the trust scheme with a priority/subordinated structure, we were able to achieve product characteristics close to a "mezzanine loan" that balances risk and return.

In the future, it may become possible to construct schemes that combine debt components (such as loans and corporate bonds) while relying on trust as a foundation. As fundraising methods diversify, if product designs allow investors to choose between equity (such as stocks without repayment obligations) and debt, the market will likely mature further.

Mr. Hidaka: As a company, we focused on designing products for our first project that would allow a wide range of investors to hold them with confidence. However, depending on the needs of investors, we are also considering products with higher risk and return, and we want to contribute to market formation. We believe that by increasing the options for returns, a market that meets the diverse needs of investors will be formed.

In the future, it will not only remain in real estate but also consider expansion into other asset classes such as content production financing and loan receivables. ST has the characteristic of deepening relationships with investors through feature design, and it is believed that by incorporating fan marketing methods, it will be possible to broaden the market's base.

──Finally, I would like to hear your outlook on the market and a message for the readers.

Kuroda: In the ST business, there tends to be a focus on the advancement of digital technologies and schemes, but the essence lies in the real estate asset itself. Deeply understanding its value and characteristics is essential for reliable product design. I believe that our significant role in the asset aspect in collaboration with Credit Saison has been very meaningful and has contributed to the accumulation of practical knowledge in the ST market.

! In the future, we expect that the scope of ST will expand to assets other than real estate. The natural step would be to expand to real estate-related assets that are easy to monetize. We would like to contribute to the expansion of the market in this direction first.

Mr. Hidaka: This initiative may be the first step in providing our 23.42 million card members (number of individual cardholders as of the end of March 2025) with an opportunity to experience investment more easily.

ST enables fractional ownership and easier access to blockchain technology, allowing many people to access assets that were previously only available to a select few wealthy individuals. This deeply aligns with our company's philosophy of "democratizing finance." We hope that as many people as possible will become interested in this new financial experience.