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| Seoul's financial district on Yeouido / Korea Times file |
By Lee Min-hyung
Brokerage houses here are preparing to jump into the nascent securities token market after a financial watchdog approved Thursday the issuance of blockchain-powered digital tokens.
Financial Services Commission (FSC) Chairman Kim Joo-hyun said securities token offerings (STO) will be legally available in Korea. The decision came amid growing demand for tokenized digital assets here and abroad.
"STOs were not allowed under the legal system, but considering the digital paradigm shift and demand of the times, we will permit the issuance of securities tokens and build a safe distribution system," Kim said.
The watchdog plans to institutionalize the operation of distribution platforms for the digital tokens, and details will be announced as early as February.
STOs are a relatively new concept in the global investment market, made possible by the rise of blockchain technology. Existing investment and securities firms are also identifying it as one of the next new revenue sources.
KB Securities is one of the most active players among the local brokerage houses. The company completed tests for its own STO platform, and plans to launch relevant services in the first half of 2023.
The platform will help connect token issuers and investors. The company focused on testing whether its blockchain technology is secure enough to distribute securities tokens to online wallets, according to KB Securities.
"We have completed development for key functions of the platform, and will keep complementing the platform to launch the service to customers by the end of the first half of this year," an official from the company said.
Other securities firms are also moving in the same direction.
Kiwoom Securities is set to update its mobile trading system to enable investors to trade securities tokens before the end of the year. Shinhan Securities is also scheduled to launch its token-trading platform this year, with a view to expanding its footing into the emerging area amid lukewarm stock sentiment.
Industry sources said it remains to be seen how much the securities token market will grow.
"Securities tokens will help investors trade assets ― such as real estate and art ― through the digital platform," an official from a securities firm said. "But this is a wholly new investment area, so we still need to wait and see how the initial market response is before setting up a more specific strategy."
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