Tokenized securities, known as STOs, could become a new financial tool to share profits from real estate development with the public and help reduce damage from jeonse rental fraud, speakers said at a National Assembly-linked forum as South Korea prepares to bring STOs into the regulated system.
The Democratic Party’s Digital Assets Task Force held a discussion on April 28 at the Korea Financial Investment Association’s training center in Seoul’s Yeouido district, focusing on real estate finance models using STOs and possible responses to jeonse fraud.
Participants included In Ho, a professor at Korea University’s Blockchain Research Institute (KDAA); Hong Seung-pil, a professor at Hanshin University; Ahn Chang-won, a program manager at the Institute of Information & Communications Technology Planning & Evaluation; Kim Jin-hoe, an official at the Ministry of Science and ICT’s Digital Society Planning Division; Kim Dong-wook, a managing director at Hana Securities; Chu Hyo-hyun, vice president at Apanda Partners; and Park Sang-wook, a unit head at Bankware Global.
In, the first presenter, proposed using STOs to return a share of real estate development gains to the public. “Global tokenized assets are expected to grow to about $16 trillion by 2030,” he said, adding, “We no longer have time to stay at the starting line.”
He said STOs had been limited by a lack of legal basis and the absence of a secondary market, but that revisions to laws have now created an institutional foundation. “It’s time to move to the execution stage,” he said.
In outlined three real estate STO models: a national housing welfare fund model, a presale-linked model and a national dividend model. Under the concept, the public could participate in development projects and share profits in the form of dividends.
“Traditional real estate development has been a zero-sum structure among stakeholders, but applying STOs shifts it to a structure where everyone shares gains,” he said. He described it as providing “basic assets,” not basic income, to the public.
Hong presented a “jeonse deposit STO” model, saying tokenizing the deposit structure could help ease problems. He said blockchain could transparently record property rights information, while smart contracts could automate contract performance and compensation procedures.
“Smart contracts are difficult to manipulate and execute automatically, which can lower the risk of jeonse fraud,” Hong said. “Tenants can reduce deposit risk, and landlords can secure asset liquidity.” He added that combining artificial intelligence for abnormal-transaction detection and risk forecasting could enable a more sophisticated real estate finance system.
The National Assembly passed amendments in January to the Electronic Securities Act and the Capital Markets Act to introduce STOs. With the system set to take effect on Feb. 4 next year, detailed rules are being designed.
The Financial Services Commission last month held the first meeting of a public-private “token securities consultative body” to discuss operating plans and policy direction. The group is to run on an ongoing basis through four working divisions covering technology and infrastructure, issuance, distribution and settlement.
* This article has been translated by AI.
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