Call for Regulation of Tokenized Securities in South Korea
Industry leaders and central bank officials in South Korea have urged the government to take immediate action to regulate tokenized securities. This call for regulation comes as key players continue to await the approval of Security Token Offerings (STOs). According to a report by ET News, this plea was voiced during a summit organized by the Korea Securities Association (KSA) on August 27, where representatives from the Central Bank, regulatory agencies, and the securities industry gathered to discuss the urgent need for regulatory measures.
Seoul’s Potential Action on Tokenized Securities
The KSA highlighted that “digital assets” are poised to shape the future of the financial market. Speakers at the summit emphasized the necessity for Seoul to take decisive measures, including legalizing tokenized securities. Yoon Seong-kwan, Director of Digital Currency Policy at the Bank of Korea (BOK), underscored the importance of tokenization as South Korea transitions to a digital economy. He stated that the central bank would likely serve a crucial role by providing a “final settlement asset” to bolster safe digital asset transactions.
Legislation for Financial Market Stability
Lee Jun-seo, Chairman of the KSA, echoed the sentiment for more comprehensive legislation, arguing that the role of digital assets is critically important. He warned against neglecting this legislative need, which could lead to increased instability in financial markets and issues concerning consumer protection. Additionally, he reminded attendees of an STO bill currently pending in the National Assembly and urged a systematic reorganization of the financial infrastructure to accommodate STOs, which could become a significant driver of economic growth.
Global Competition in Financial Infrastructure
Seo Yu-seok, head of the Korea Financial Investment Association, emphasized the fierce competition among advanced economies striving to leverage blockchain technology for financial infrastructure advancements. He stated that South Korea must not lag in this critical area and should prioritize the introduction of legislation related to tokenized securities.
Industry Support for STO Regulation
Industry chiefs shared a consensus on the urgent need for regulations governing STOs. Ryu Ji-hae, a director at Mirae Asset, noted that incorporating the token securities system into the legal framework would enable the development of diverse underlying assets and innovative financial products. He highlighted that recognizing distributed ledgers legally could be a pivotal step toward establishing blockchain’s role in the financial industry.
Supporting Access to STO Markets
During a panel discussion, participants agreed on the necessity for relevant laws to support the STO industry and advocated for the government to assist companies looking to enter the virtual asset market. Furthermore, there was a consensus that not only fintech firms and securities providers should benefit from access to the STO markets but also general South Korean companies.
Growing Interest in STO Market
Reports suggest that multiple South Korean companies are preparing STO platforms in anticipation of government approval. Analysts predict that the nation’s STO market could reach a valuation of $287 billion by 2030, with major commercial banks eager to enter the sector. Kevin Murcko, CEO and Founder of CoinMetro, commented on the implications of tokenization for markets, stating that optimizing settlements could significantly reduce time and opportunity costs. He also believes that the push for tokenization would eventually extend to traditionally illiquid markets, such as art and gemstones, creating new liquidity opportunities for investors.