Flood of Securities Firms Forming 'Token Securities Alliance'... Joining Hands with ICT, Content, and Banks

Major Securities Firms Form Consortium to Seize Market
Institutionalization Expected by End of Next Year... "Securing Underlying Assets is Key to Competitiveness"

The Financial Services Commission has presented a timeline for the institutionalization of token securities, intensifying the competition among securities firms to capture the market. Major securities companies are preparing to pioneer the market by forming 'token securities alliances' with companies from various fields, including information and communication technology (ICT).

According to industry sources on the 31st, Mirae Asset Securities signed a memorandum of understanding (MOU) the day before with SK Telecom to form the 'Next Finance Initiative' consortium for the preparation and promotion of the token securities business. The partnership between a major securities firm and a telecommunications company has attracted significant attention in the market.

There is also an assessment that by partnering with SK Telecom, a leader in the ICT industry, Mirae Asset Securities has secured a favorable position in the token market. SK Telecom is expected to leverage its capabilities in IT and infrastructure fields such as blockchain, which form the foundation of token securities, while Mirae Asset Securities will be responsible for discovering and issuing underlying assets. Furthermore, they plan to collaborate across various fields beyond just token securities.

Ryu Ji-hae, Director of the Digital Asset Task Force (TF) at Mirae Asset Securities, said, "Telecommunications companies engage with diverse customer bases and numerous businesses, so we want to broadly experiment with token securities, blockchain, and other areas," adding, "We will attempt collaborations with companies from various industries going forward." For example, they plan to explore collaboration points such as linking token securities with wallet services or issuing non-fungible tokens (NFTs) in the metaverse.

Choi Hyun-man, Chairman of Mirae Asset Securities, also stated at the regular shareholders' meeting held on the 23rd, "Recently, Korea has laid the groundwork for the world's first institutionalization of security tokens, creating an environment for pioneering new markets," and added, "We plan to lead the market with high-quality solutions, as we have been preparing in advance."

Night view of Yeouido stock market. Photo by Dongju Yoon doso7@

The Financial Services Commission announced a timeline aiming to submit a bill for the institutionalization of token securities in the first half of this year and to implement it by the end of next year. Token securities refer to securities based on blockchain technology. Although they appear as tokens, their content is securities, so they are subject to regulation under the Capital Markets Act. Token securities can be issued for standardized securities such as equity securities, debt securities, derivative-linked securities, and beneficiary certificates, as well as non-standardized securities like investment contract securities. There is also a forecast that the market size will grow to 367 trillion won by 2030.

NH Investment & Securities has formed a consultative body called the 'STO Vision Group' to build an ecosystem in the token securities market. Participants include ▲fractional investment operators Together Art (artworks), Treasurer (luxury goods and collectibles), Greenery (ESG carbon credits) ▲unlisted stock brokerage firm Seoul Exchange Unlisted ▲blockchain technology companies Block Odyssey, Parameta (formerly ICONLOOP) ▲underlying asset appraisal firm Korea Ratings.

The STO Vision Group selectively recruits participating companies and operates in a way that these companies share business models to create synergy. Shim Jae-hoon, Head of Digital New Business at NH Investment & Securities, said, "The STO Vision Group will play the role of a facilitator supporting companies across various industries," adding, "The key point is that companies capable of mutually benefiting from each other in diverse fields have joined the consortium." He further explained, "The consultative body is not open but selectively open, meaning it is structured to share business models or ideas rather than randomly gathering companies."

KB Securities has also formed a consultative body called 'ST Owners' with technology-specialized companies such as SK C&C, EQBR, High Five Lab, and Wave Ridge, as well as companies like Stock Keeper (Korean beef), R&L (film content distribution), Webtoon All (webtoons), and Funderful (performances and exhibitions). Seok Woo-young, Head of Digital Asset Business Promotion at KB Securities, said, "In the early stages of the token securities market, it is important to enable various operators with innovative business models to present products to customers," adding, "KB Securities plans to support and collaborate at each stage from productization to delivery to customers, striving to create a win-win ecosystem."

Korea Investment & Securities distinguishes itself by building alliances with financial companies such as Kakao Bank and Toss Bank. The consultative body 'Korea Investment ST Friends' plans to attract investors based on the platform accessibility of Kakao Bank and Toss Bank and operate the ecosystem to encourage participation from various companies.

The 'STO Alliance,' centered on Shinhan Investment Corp., was formed last month and reportedly includes 40 to 50 participating companies. Shinhan Investment Corp. plans to operate the consortium by sharing various ideas and devising strategies suited to the situation rather than setting a specific direction in advance.

In addition, several other securities firms are stepping up to establish a foundation in the token securities market. For example, Eugene Investment & Securities signed an MOU with SK Securities and Korea Maritime Asset Exchange (KMAX). They will jointly promote token securities issuance projects for various maritime assets, including ship finance, smart containers, and port operation rights in the long term.

Daishin Financial Group acquired Casa, a real estate fractional investment platform. Hana Securities is pushing forward with forming a consultative body with ITCEN, which holds the largest stake in the Korea Gold Exchange. Through this, they plan to create a system that allows fractional investment in gold and silver.

An industry insider explained, "Securing underlying assets leads to competitiveness in the token securities market, so the more partnerships with various companies, the more investors can be secured when the market opens," adding, "Since the underlying assets are very diverse, building a solid lineup is a competitive advantage, which is why companies are actively forming consultative bodies."