#Taiwan #STO #GreenFinance #Blockchain #FinancialInnovation #CathaySecurities #TokenizedAssets #DigitalSecurities
Taiwan’s Financial Supervisory Commission (FSC) has made history by granting Cathay Securities the nation’s first security token offering (STO) license. The STO, named “Sunshine Green Yield,” has been approved by regulators and offers a six-year maturity, an initial annual interest rate of 3.5%, and an initial principal amount of 30 million New Taiwan dollars ($930,000). This groundbreaking STO provides enterprise owners with a new way to participate in token subscriptions, enabling them to acquire green electricity under favorable market conditions and support environmental, social, and corporate governance initiatives. Participants in the STO can benefit from variable interest rate payments, reaching up to 5.8% per annum. The trading debut for the Sunshine Green Yield bonds is scheduled for December 12 on Cathay’s in-house STO exchange platform.
Taiwan’s FSC has been classifying tokenized assets as securities since 2019, providing a regulatory framework for financial institutions to seek licensing. However, there are strict conditions in place, including a fundraising cap of $930,000 and a limit of two STOs annually for issuers. These opportunities are exclusively available to enterprises and accredited investors, with the latter facing a maximum STO purchase limit of $9,300. Cathay Securities, a major financial services firm, has collaborated with risk-control technology company Numerix and National Chung Hsing University professor Ye Zongying to develop Taiwan’s inaugural STO evaluation model. This model calculates the default probability of small and medium-sized businesses and ensures the credibility of the STO interest rate pricing. With the launch of the Sunshine Green Yield STO, Taiwan’s financial sector takes a pioneering step towards integrating blockchain-based financial instruments to promote sustainability and responsible business practices. As trading for the Sunshine Green Yield bonds commences, the industry will closely observe how other financial institutions navigate this space and contribute to the broader adoption of digital securities in the country.
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