M
itsubishi UFJ Financial Group (MUFG) has acquired a ¥100 billion ($681 million) high-rise property in Osaka, marking a significant push into tokenized real estate in Japan. The building will be converted into a private real estate investment trust (REIT) for institutional investors and tokenized slices for retail buyers. This move reflects Japan's focus on commercial property tokenization over digital bonds, a trend observed since 2021 when ¥194 billion ($1.3 billion) worth of digital securities were issued.

    MUFG aims to democratize access to large commercial assets by fractionalizing ownership through tokens, enabling retail investors to participate in real estate markets without requiring substantial capital. The private REIT structure offers institutions a conventional entry point, while the market remains nascent with limited trade volumes on platforms like the Osaka Digital Exchange's START market.

    The acquisition highlights evolving dynamics between MUFG and Mitsui Digital Asset Management, which previously partnered on tokenized real estate but has since established its own Alterna Trust system. Despite this shift, both entities remain linked through Progmat, MUFG's security token platform, with MUFG retaining a 42% stake. This hybrid strategy balances direct competition with strategic collaboration in Japan's growing digital asset ecosystem.

    The transaction underscores Japan's cautious adoption of blockchain for asset tokenization, with regulatory clarity and infrastructure development lagging behind demand. Market participants like MUFG are testing boundaries to establish scalable models, but low liquidity of existing tokens suggests broader institutional and retail adoption hinges on overcoming operational hurdles and building trust in digital ownership mechanisms.