Amendments to Japanese Financial Instruments and Exchange Act of 2019, which became effective on May 1, 2020, clarify that Security Token Offering (STO) and Initial Coin Offering (ICO) are regulated under the Act. The Act says, "electronically recorded monetary claims specified by Cabinet Order as those which, in consideration of transferability and other circumstances, it is found to be necessary to deem corporate bond certificates or any other securities specified in the items of the preceding paragraph, are deemed to be such securities."
When ICO is used as an investment vehicle, it is regulated under the Financial Instruments and Exchange Act. When ICO is used for payment or settlement purpose, ICO is regulated under Japanese Payment Services Act, amendments of which acknowledge virtual currencies and Virtual Currency Exchange Service Provider.
As stated in the article, SBI Holdings announced on March 26, 2021, that they are the first company that officially changed their registration required to handle Security Token Offering (STO).