Korea Investment & Securities Builds Industry-First Token Securities Distributed Ledger Infrastructure

Korea Investment & Securities, a subsidiary of Korea Financial Group, announced on the 21st that it has completed the establishment of the token securities issuance infrastructure, the first of its kind in the industry.

Token securities are digitized securities issued using Distributed Ledger Technology (DLT). They represent a new form of issuance following physical securities and electronic securities. Rights to tangible assets such as real estate, ships, aircraft, and artworks can be easily liquidated and converted into "security-type digital assets," enabling fractional investment.

The token securities consortium "Korea Investment ST Friends," centered on Korea Investment & Securities and including KakaoBank, Toss Bank, Kakao Enterprise, and Open Asset, began building the issuance infrastructure in May. They developed infrastructure that implements all processes necessary for token securities issuance and settlement for the first time in Korea and completed a pilot issuance.

Considering the legislative stage of the token securities business, Korea Investment & Securities implemented the distributed ledger infrastructure based on a cloud system. The system can be flexibly improved according to regulatory changes. By adopting an agile development approach, they shortened development time through rapid decision-making and efficient collaboration.

The new issuance infrastructure has also been integrated to operate organically without conflicts with existing securities trading systems. Unlike typical financial systems that record in centralized ledgers, they resolved technical issues to effectively connect token securities recorded on distributed ledgers.

To link the two systems, Korea Investment & Securities developed and applied new technologies based on accumulated know-how. Among these, ▲ dividend processing through smart contracts ▲ immediate transaction finality guaranteed by using distributed ledger escrow deposits ▲ personal information processing and protection technologies are currently undergoing patent applications. They plan to secure technological superiority leading the industry by proving the high technical capability and system stability of the token securities infrastructure.

Choi Seoryong, Head of the Platform Division, said, "We expect the infrastructure to be a crucial turning point in the process of integrating distributed ledger technology into the regulated financial sector," adding, "While striving to discover high-quality assets reflecting investor needs, we will also take the lead in protecting investors and solidifying our position."

Korea Investment ST Friends will continue to strengthen stability and functionality by conducting various field tests throughout the entire issuance and settlement process of token securities products. Additionally, to build the token securities ecosystem, they plan to collaborate with content companies across various categories, including Fundapool and ValueMap, focusing on the commercialization of token securities products.