Tokyo Metropolitan Government subsidizes security token issuance

Digital securities issued utilizing blockchain technology have features such as enabling issuance in small lots compared to conventional securities and allowing direct connection between issuers and investors. They are expected to accelerate the flow from savings to investment. This fiscal year, the Tokyo Metropolitan Government will further strengthen efforts to expand the market by creating diverse cases of digital securities issuance and widely sharing expertise and challenges.

Project Overview

A portion of the expenses required for issuance will be subsidized for businesses in Tokyo issuing digital securities based on the Financial Instruments and Exchange Act.

The subsidy rate is 1/2 (2/3 for startups). The upper limit is 5 million yen per project. For the priority fields below, the upper limit is 7.5 million yen:

• Providing new investment opportunities for individuals toward innovation creation/solving social issues
• Providing new investment experiences for individuals by leveraging digital technologies

Regardless of the priority fields, if a subsidy was received through the “Digital Securities (Security Token) Issuance Support Project” implemented by the Tokyo Metropolitan Government in FY2023, the upper limit is 3 million yen.

From Tuesday, April 30, 2026 to Friday, January 31, 2027, applications are accepted on an ongoing basis. However, if the Tokyo Metropolitan Government’s budget limit for this project is reached, applications will be closed. Screening for subsidy adoption is scheduled to be conducted at a review meeting held roughly every 1–2 months.

Application documents are available on the Tokyo Metropolitan Government website.

FAQs

[About Eligible Projects and Recipients]

Q1. Are projects started before the grant decision ineligible for the subsidy?
A1. Projects started before the grant decision are not eligible for the subsidy. Please make sure to start the eligible project, including contracts and payments, after the grant decision.

Q2. Who is the “business operator that issues security tokens” as an eligible recipient?
A2. We expect entities such as corporate bond issuers or trustees of trust funds issuing beneficiary certificates, but various issuance schemes are possible, so we will determine on a case-by-case basis in accordance with the actual circumstances.

Q3. What does it mean for a “startup” to have “substantial management participation by a large company”?
A3. A “large company” refers to a company larger in scale than a “small and medium-sized enterprise” under the Small and Medium-sized Enterprise Basic Act. “Substantial management participation” refers to cases where a large company is effectively controlling the management, such as when a single large company owns or invests more than half of the total issued shares or total investment, when multiple large companies own or invest two-thirds or more of the total, or when half or more of the total officers concurrently serve as officers or employees of large companies.

Q4. Can a business operator adopted for the “Digital Securities (Security Tokens) Issuance Support Project Subsidy” in fiscal 2023 apply?
A4. Yes, it is possible. However, during the screening process, we will evaluate whether continued support from the Tokyo Metropolitan Government is expected to sufficiently contribute to further market expansion, etc., such as if the scheme or target buyers differ from the fiscal 2023 project.

As stipulated in “4. Subsidy Amount” of the Application Guidelines, eligible recipients for fiscal 2023 projects also include those recognized by the Tokyo Metropolitan Government as substantive issuers, etc. of the projects implemented by fiscal 2023 recipients, based on the scheme, product design, sales methods, etc.

Q5. What does “substantive issuer, etc.” mean as mentioned in “4. Subsidy Amount” and “7. (2) ③ Other” of the Application Guidelines?
A5. For example, even if the issuers are formally different, such as in the case of a trust fund issuing beneficiary certificates having the same originator, we assume cases where the same business operator is planning and instructing the issuance of security tokens. However, various issuance schemes are possible, so we will determine on a case-by-case basis in accordance with the actual circumstances.

Q6. If the issuance is postponed after the grant decision, will it still be eligible?
A6. Please report the change to the Tokyo Metropolitan Government, and if necessary, submit a change application form (Form 7). The project will be eligible if the change is approved.

Q7. Can I publicly announce or inform third parties that my business has been selected for the subsidy after the grant decision?
A7. As stipulated in “8. Other” of the Application Guidelines, in principle, do not publicly announce or inform others that you have been selected for the subsidy until the subscription for the eligible project is completed and the Tokyo Metropolitan Government makes an announcement.

[About Priority Areas]

Q8. How are priority areas recognized?
A8. Priority areas are determined by the Tokyo Metropolitan Government after the screening by the review committee. The review committee will evaluate contributions to priority areas in terms of “a. Innovation” and “b. Social Significance” under “7. (2) ② Screening Perspectives” of the Application Guidelines.

Q9. Are there any formal requirements to be recognized as a priority area?
A9. There are no formal requirements at the application stage, but projects that do not align at all with the priority areas of “Providing new investment opportunities for individuals to promote innovation and solve social issues” and “Providing new investment experiences for individuals leveraging digital technologies” are unlikely to be recognized as priority areas. For example, projects not issuing digital securities to individuals.

Note that conditions may be attached for recognition as a priority area, depending on the content.

(Example conditions)
- (For a case where individuals can make small investments in SDGs bonds) Obtain third-party evaluation/certification that the project conforms to the principles/guidelines for issuing SDGs bonds published by the International Capital Market Association, etc.
- (For a case where individuals can make small investments in startups) Clearly state in the fund partnership agreement or other documents that investments will be made in startups.

Q10. Is it possible to be recognized as a priority area even if not applied for as such?
A10. No, you will not be recognized as a priority area if you do not apply for it.
Please make sure to check the applicable priority area and fill in the necessary information in the application form.

Q11. If not recognized as a priority area, is there still a possibility of being selected as a regular (non-priority) project?
A11. Even if you applied for but were not recognized as a priority area, you may still be selected as a regular project within the subsidy limit of 5 million yen if you exceed the specified adoption criteria.

Q12. What is the subsidy limit if a fiscal 2023 project is selected as a priority area case?
A12. The subsidy limit is 3 million yen.

[About Eligible Expenses and Subsidy Amounts]

Q13. For platform usage fees, which are eligible expenses, if the contract requires monthly payments, are they eligible?
A13. Payments made by March 31, 2025 are eligible, but payments made on or after April 1, 2025 are not eligible.

Q14. For calculating the subsidy amount, should the fractions below 1,000 yen be truncated for each expense category or for the total amount?
A14. Please truncate fractions below 1,000 yen for each expense category.

(Example)
Eligible Expenses
(1) Platform Usage Fees: 1,001,000 yen
(2) Consultation Fees for Experts, etc.: 1,001,000 yen
Total: 2,002,000 yen

Subsidy Application Amount (Multiply the subsidy rate (1/2) for each expense category and truncate fractions below 1,000 yen)
(1) Platform Usage Fees: 500,000 yen
(2) Consultation Fees for Experts, etc.: 500,000 yen
Total: 1,000,000 yen

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