Metaplanet will launch preferred stocks based on Bitcoin in Japan

Metaplanet confirmed that the plan to issue the first Bitcoin-based permanent preferred stock in Japan has been delayed as the company faces unprecedented legal requirements in the Japanese capital market.

5/16/20265 min read

The first eternal preferred stock in Japanese history

Metaplanet's proposed instrument will become the seventh listed preferred stock in Japan and the first instrument to be structured as a perpetual security with no maturity date. This rarity reflects that Japan's preferred stock market is still underdeveloped compared to the United States, where thousands of such securities are actively traded. The introduction of perpetual preferred stocks associated with Bitcoin into this fledgling market requires building completely new legal frameworks and operational infrastructure that do not exist in the Japanese financial sector.

This structure provides investors with a fixed dividend limited to about 4.9% to 6% annually depending on each issue, with any increase in the price of Bitcoin exceeding that level will be added to Metaplanet's enterprise value instead of flowing into the hands of preferred shareholders. This design allows the company to raise capital to continue accumulating Bitcoin while limiting the dilution of the interests of common shareholders in the face of the increase in the price of Bitcoin. Holders of preferred shares receive stable income similar to bonds, while common shareholders still retain full potential profits from Bitcoin exceeding the dividend threshold.

Mr. Gerovich explained that the regulations of the Japanese exchange require preferential dividends to be supported by sustainable cash flow, periodically evaluated in a variety of market conditions. Metaplanet must prove that their Bitcoin-generating business model can generate stable profits even in a disadvantageous Bitcoin environment, even though it has only been operating for six quarters. The regulator's oversight reflects concerns that Bitcoin's volatility makes dividend commitments risky, especially for permanent instruments where dividend obligations never expire.

Monthly dividend payment poses a challenge

In addition to demonstrating sustainable cash flow, Metaplanet also faces operational challenges related to its ambition to pay monthly dividends, much more often than Japan's typical one- or two-a-year cycle. The company must build a completely new dividend infrastructure that revolves around the date of recognition, payment processing and communication with shareholders that Japanese brokerage companies and transfer agents cannot afford to handle. Most Japanese companies maintain a semi-annual closed shareholder register to calculate dividends, making monthly distribution logistically complicated without significant system development.

The monthly dividend structure meets investors' demand for stable income streams similar to bond interest rates, positioning perpetual preferred stocks as a fixed income alternative associated with cryptocurrencies. Traditional Japanese investors who are used to stable yields from government bonds and corporate debt find the volatility of cryptocurrencies unattractive, but monthly dividends from income generated from Bitcoin can attract capital seeking higher profits than Japan's near-sero interest rate environment. The challenge is to prove that the income model from Bitcoin can provide monthly payments reliably.

Metaplanet's Bitcoin treasury management strategy generates revenue through a variety of mechanisms, including lending Bitcoin to organizations for profits, providing liquidity to exchanges and trading departments, and taking advantage of the price difference between the spot market and the futures market. The company reported stable cash flow in both strong and weak Bitcoin market periods for six consecutive quarters, but regulators want evidence spanning a longer time frame and more diverse market conditions before approving the permanent dividend obligation.

12-month lead advantage

This delay takes place in the context of strategic coordination with the executive chairman of MicroStrategy, Michael Saylor, who clearly stated at the Bitcoin MENA Conference that Strategy will not issue perpetual preferred shares in Japan within the next twelve months. Mr. Saylor believes that this will help Metaplanet have a leading advantage to establish the Japanese market for preferred stocks associated with Bitcoin without having to compete directly with the larger, older US company.

Strategy has succeeded in launching four perpetual preferred stocks in the United States and one euro product in Europe, proving the feasibility of this model in developed capital markets. These products are traded under codes such as STRK and STRF in the US market, bringing yields from 6% to 10% depending on the release batch and market conditions. The success of Strategy provides a model that Metaplanet wants to replicate in Japan, although regulatory and cultural differences require significant adaptation.

The collaboration between Mr. Saylor and the CEO of Metaplanet, Gerovich, reflects the perception that Bitcoin treasury management companies benefit from market development rather than unfair competition with each other. The establishment of preferred shares as a legitimate capital mobilization tool for companies focusing on Bitcoin requires the approval of the regulator, investor education and the operating infrastructure that the initial investors must build. Once established, the market can support many issuers in different geographical areas without reducing the attractiveness of this type of asset.

Metaplanet plans to launch two products called Mercury and Mars, with Mercury aiming for an annual profit of 4.9% and being positioned as a safer and more cautious product. Mars will simulate Strategy's high-yield short-term credit product STRC, providing higher profits with different risk characteristics. The dual-product approach allows Metaplanet to serve both investors looking for cautious returns and those who are willing to take higher risks for better returns, expanding the base of potential investors.

Evaluation and conclusion

Mr. Gerovich emphasized that bringing perpetual preferred stocks to the market requires patience due to the unprecedented nature of this product in the Japanese capital market. The company is actively working with regulators to solve sustainability issues and build operating infrastructure for monthly dividend payments. Although it did not give a specific timeline, the company said that the listing could take place in 2026 after meeting legal requirements and establishing an operating system.

The successful launch will create an important precedent for other Japanese companies considering Bitcoin asset management strategies or finding ways to raise capital through Bitcoin-linked securities. Japan's conservative financial culture has so far opposed the testing of cryptocurrencies at the corporate level, but Metaplanet's institutional approach through regulated securities can pave the way for wider adoption. Large Japanese corporations with excess cash on the balance sheet may consider Bitcoin allocation more favorable if market instruments have been established to allow exposure at the institutional level.

The delay also highlights the fundamental tension between the global nature, 24/7 operation of cryptocurrencies and the traditional capital market built on the working day cycle and the national legal framework. Metaplanet must prove that the income generated from Bitcoin can comply with Japanese dividend sustainability standards designed for industrial companies with predictable cash flow. The strict supervision of the regulator reflects Japan's cautious approach to financial innovation, prioritizing investor protection and system stability over rapid market development.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrencies. This is not financial or investment advice at all. Every investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The opinion in the article does not represent the official position of the platform. We recommend that readers do their own research and consult experts before making any investment decisions.

Synthesized and analyzed by HCCVenture

Follow HCCVenture organization here: https://link3.to/holdcoincventure

Explore HCCVenture group

Connect with us

Disclaimer: The information on this website is for informational purposes only and should not be considered investment advice. We are not responsible for any risks or losses arising from investment decisions based on the content here.

TERMS AND CONDITIONS • CUSTOMER PROTECTION POLICY

ANALYTICAL AND NEWS CONTENT IS COMPILED AND PROVIDED BY EXPERTS IN THE FIELD OF DIGITAL FINANCE AND BLOCKCHAIN BELONGING TO HCCVENTURE ORGANIZATION, INCLUDING OWNERSHIP OF THE CONTENT.

RESPONSIBLE FOR MANAGING ALL CONTENT AND ANALYSIS: HCCVENTURE FOUNDER - TRUONG MINH HUY

Read warnings about scams and phishing emails — REPORT A PROBLEM WITH OUR SITE.