Mobilizing "Idle Public Assets" with Resident Money — TMI, TIS, and SMTRI Publish First Findings on Tokenizing Public Facilities

■ "Ownership can't move, but receivables can"

The three firms launched a "Joint Study Group on Tokenizing Public Facilities and Infrastructure," organizing the issues from legal, economic, and technical angles. The study examined ownership and transferability across arenas, closed elementary/junior-high schools, old private houses, ordinary roads, water and sewage systems, and solar plants. Where a facility is publicly owned, transferring the ownership itself to a third party was deemed not feasible; however, monetary claims such as service-fee receivables and electricity-sale receivables were judged transferable, subject to counterparties' consent. Operating rights, too, can legally be transferred with permission from the public side, but require negotiation according to the nature of each project.

■ Arenas and solar promising; closed schools and water cautious

Suitability as an ST investment product varied widely. Arenas and solar plants — at a certain scale with reasonably predictable cash flows — were seen as areas where profitability and local/social value can coexist. Closed-school redevelopment, by contrast, has small individual scale and volatile returns, so its profitability as an investment product is limited; yet its strong community-participation, "support-the-area" character holds appeal for investors prioritizing social significance. Large infrastructure like water and sewage, while highly stable in revenue, requires careful study before tokenization given legal constraints and sheer scale. On product design, where rights are transferable, STs backed by asset ownership, operating rights, or monetary claims are conceivable; where not, tokenizing a private operator's silent-partnership (TK) interests, corporate bonds, loan claims, or corporate financing becomes an option.

■ A new frontier: tokenizing municipal bonds

Notably, the study probed introducing STs to municipal bonds to diversify government fundraising. Municipal bonds are issued under the Local Autonomy Act and Local Finance Act, with proceeds limited to public enterprises like water/sewage and construction of schools and roads. Thus, depending on the project, municipal-bond use may be possible — though real application requires legal interpretation and negotiation with local governments. The firms cited future issues including product/scheme design tailored to deal characteristics, sales channels and investor protection, liquidity and secondary circulation, and settlement/operational structures, and will work with municipalities, operators, and regional financial institutions.

##[Business Development Insights]

1. The essence of public RWA is not "securitizing ownership" but "structuring cash flows and operating rights." Even when ownership cannot be transferred, the design room to switch backing assets to monetary claims, operating rights, TK interests, or bonds shows that "scheme-orchestration capability" — recomposing legal schemes per asset type — is a differentiator for RWA/ST infrastructure providers.
2. Tokenizing municipal bonds could be the entry point to a vast, untouched "government fundraising market." Japan's digital securities grew to roughly ¥250 billion in total assets as of 2024, mostly real-estate STs. If public enterprises and facilities are institutionally unlocked as new backing assets, the market's base expands dramatically. The high barrier of regulatory interpretation and municipal negotiation, conversely, strengthens first-mover advantage.
3. "Area-support STs" that work even with low profitability open demand distinct from conventional investment logic. Designs bought for social significance despite limited returns — like closed-school redevelopment — attempt to connect hometown-tax-style motivation to on-chain funding circulation. For infrastructure providers, handling two tiers of demand — pure investors and community-contribution investors — on one base, through KYC, suitability, and circulation design, becomes a fresh opportunity.

[Sources]

• NewEconomy, "TMI, TIS, and SMTRI Jointly Study Tokenizing Public Facilities; Municipal Bond Use Also Examined" (May 28, 2026) https://www.neweconomy.jp/posts/577245
• TIS press release, "TMI Associates, TIS, and Mitsui Sumitomo Trust Research Institute Conduct Joint Study on Security Tokens for Public Facilities and Infrastructure" (May 28, 2026) https://www.tis.co.jp/news/2026/tis_news/20260528_1.html
• Mitsui Sumitomo Trust Research Institute (SMTRI), Research & Consulting https://www.smtri.jp/
• SMTRI, "Real-Estate ST Market Continues Steady Expansion" https://www.smtri.jp/report_column/info_cafe/2025_03_17_6501.html
• PaymentNavi, "Joint Study on Security Tokens for Public Facilities and Infrastructure (TMI/TIS/SMTRI)" https://paymentnavi.com/paymentnews/175180.html