[Bitcoin Now] Three-Way Race for Fractional Investment Exchange Approval... STO Market Set to Open Soon

Three Consortiums Including KDX, NXT, and LucentBlock Apply for Preliminary Approval
"A Turning Point in Building the STO Ecosystem"

The competition for preliminary approval of the OTC marketplace (distribution platform) for fractional investment has narrowed to three contenders. The financial authorities plan to select two companies within this year. There are no disagreements in the National Assembly regarding the Security Token Offering (STO) bill, so the related market is expected to fully open next year.

According to the financial authorities on November 6, three consortiums-KDX Consortium, NXT Consortium, and LucentBlock Consortium-have submitted applications for preliminary approval to operate an OTC marketplace for fractional investment.

The largest among them is the KDX Consortium, led by Korea Exchange, with participation from Kiwoom Securities, Kyobo Life Insurance, Kakao Pay Securities, and Heungkuk Securities. The fractional investment platform BuySellStandard is also reportedly included.

The NXT Consortium is led by alternative trading platform NextTrade as the largest shareholder, joined by Shinhan Investment & Securities, Hana Securities, Hanyang Securities, Eugene Investment & Securities, and INF Consulting. The music copyright investment platform Musicow is also part of this consortium.

The LucentBlock Consortium includes LucentBlock and Korea South Pole Venture Investment Fund, among others. LucentBlock specializes in real estate fractional investment. The Financial Services Commission plans to grant preliminary approval to up to two companies within this year after review by the Financial Supervisory Service and an external evaluation committee.

Fractional investment is a form of investment in which tangible assets such as real estate or artwork, or rights to these, are divided into multiple shares so that investors can jointly own and share profits. STO refers to the issuance of digital securities using blockchain technology, representing ownership or profit rights not only in tangible assets but also in financial assets.

Simply put, STO is a way to implement fractional investment within a blockchain-based institutional financial framework. For example, a single house can be divided into several rights units, which are then tokenized (as securitized fractions) and made tradable.

Barring any unexpected developments, the biggest hurdle-legislation-is expected to be cleared within this year. Min Byungdeok, a member of the Democratic Party of Korea, stated at a recent National Assembly forum, "There are no contentious issues with the STO bill," and added, "I believe the bill is almost finalized."

STO is considered a market with significant growth potential. According to a report released last year by Samil PwC Management Research Institute, the market capitalization of the domestic STO market is projected to grow from 34 trillion won in 2024 to 367 trillion won in 2030, representing an average annual growth rate of approximately 49%.

An industry insider explained, "This competition for approval of fractional investment distribution platforms is not simply about selecting operators; it marks the first turning point in the digital transformation of Korea's capital market and the establishment of the security token ecosystem." The insider added, "It will serve as a signal for both domestic and foreign investors to assess the openness and institutional reliability of Korea's security token market." Furthermore, "The integration of fractional investment companies into the institutional framework will further strengthen investor protection systems and market transparency," the insider said.