Exchange to Launch Token Securities Market Within the Year

Application for Regulatory Sandbox at the End of This Month

[Image source=Yonhap News]

The Korea Exchange plans to apply for designation as an innovative financial service (financial regulatory sandbox) as early as the end of this month and open a token securities (ST) market within the year.

A representative from the exchange stated on the 8th, "To launch the market within the year, we will complete the regulatory sandbox application by early next month at the latest after consultations with the authorities."

The exchange has formed a task force (TF) to build infrastructure and carry out related work to enable the launch of a digital securities market within this year.

Token securities refer to securities that digitize tangible or intangible assets using distributed ledger technology. While coins (virtual assets) such as Bitcoin are digital assets rather than securities, token securities correspond to investment contract securities or non-monetary trust beneficiary certificates under the Capital Markets Act, and thus are subject to related regulations including investor protection.

The Financial Services Commission plans to submit amendments to the Electronic Securities and Capital Markets Act to the National Assembly in the first half of the year to establish a regulatory framework for the issuance and distribution of token securities. After legislative discussions, the token securities system is expected to be fully implemented around the end of 2024.

In this case, since it will be difficult to launch the exchange’s digital securities market within the year, the exchange explained that a special exemption to temporarily suspend regulations is necessary for a certain period.