- Korea’s Financial Services Commission announces the issue of securities token offerings.
- FSC Chair Kim Joo-hyun said while STOs were not legal before, due to their demand, a distribution system is being built.
- The FSC also plans to institutionalize the operation of distribution platforms for STOs.
The Financial Services Commission (FSC) in South Korea has approved the issuance of blockchain-powered digital tokens, known as securities token offerings (STO). This allows brokerage houses in Korea to enter the securities token market, as there is a growing demand for tokenized digital assets both in Korea and abroad. This move is expected to bring more liquidity and accessibility to the market.
Addressing about the STOs, the FSC Chairman, Kim Joo-Hyun shared:
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.
In addition to approving the issuance of STOs, the Financial Services Commission plans to institutionalize the operation of distribution platforms for these digital tokens. The details of this plan will be announced as early as February.
While the rise of blockchain technology is boosting the growth of security tokens, STOs are still a comparatively new concept in the global investment market. As a result, existing investment and securities firms are identifying STOs as a potential new revenue source.
Moreover, at the 6th Financial Regulatory Innovation Conference, Chairman Joo-hyun said that he would introduce maximum guidance, sandbox test, and formal institutionalization to streamline operations and ensure a smooth settlement for the virtual asset.
Joo-hyun continued that a clear direction will help Korea lead the digital revolution in the current times. He added that the FSC is putting efforts to institutionalize over-the-counter platforms so that token securities can be traded in a secure over-the-counter market with investor protection.