Starting in February, South Korea will officially enter the era of Security Token Offerings (STO). STO utilizes blockchain technology to tokenize and trade assets such as stocks, bonds, real estate, music, and commodities. Analysts predict it will serve as a catalyst for the fourth digital finance revolution, following the rise of internet finance, fintech, and AI-driven finance. The global tokenization market is expected to reach $14 trillion by 2030, with South Korea's tokenization market projected to exceed 300 trillion won during the same period.
According to the financial investment industry on November 1, the amendments to the Electronic Securities Act and the Capital Markets Act aimed at institutionalizing STO will be implemented in February. As a result, starting next year, a range of financial products including private money market funds (MMFs) for institutional investors, private bonds, trust beneficiary securities for unlisted stocks, and public fractional investment securities will be traded in STO format.
The core of STO is the conversion of real-world assets or rights into blockchain-based 'tokens' for issuance, trading, and settlement of 'on-chain real-world assets (RWA).' This innovation is expected to shorten payment cycles, promote fractional investments, and simplify corporate financing. Experts believe that the full-scale implementation of STO will significantly transform the financial paradigm. In the United States, token securities investing in government bonds and MMFs have already emerged.
The potential for expansion is immense. Boston Consulting Group (BCG) forecasts that the global market capitalization of tokenized assets will surge from $2.3 trillion next year to $14 trillion by 2030. Additionally, a recent report from Tiger Research estimates that South Korea's tokenized asset market will reach 315 trillion won by 2030. Including stablecoins for payments and settlements (estimated at 45 trillion won), the total market size could grow to around 360 trillion won.
In anticipation of the STO era, competition among financial companies in South Korea is heating up. Major firms such as KB Securities (in partnership with Securitize and Canton), Mirae Asset Securities (with Polygon), Meritz Securities (collaborating with Ripple and Canton), and Hana Bank (partnering with BitGo) are preparing to establish the necessary infrastructure with overseas tech companies. A source in the financial investment sector stated, "With the implementation of related laws next year, the STO market centered on traditional financial assets with abundant liquidity will open up, leading to significant changes in the financial landscape."
* This article has been translated by AI.
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