The market for tokenized stocks, which represent rights to shares or profits linked to stock prices through blockchain-based digital tokens, has seen rapid growth this year. While related trading and regulatory reforms are expanding overseas, experts point out that South Korea lacks regulations for offshore issued products, highlighting a need to address this regulatory gap.
DigitalX, a digital asset investment platform under Mirae Asset, announced on the 29th that its research center has published a report analyzing the issuance structure, regulatory changes, and market status of tokenized stocks titled 'Tokenized Stocks: From Gray Area to Regulation.'
According to the report, as of October 23, the value of tokenized stocks circulating on the blockchain reached $3.58 billion, a 5.3-fold increase compared to the beginning of the year. This growth rate is the steepest among major asset classes, compared to a 54% increase in the overall market for real-world assets (RWA) during the same period.
Regulatory reforms related to tokenized stocks are also gaining momentum. In the United States, the Depository Trust Company (DTC) processed actual transactions in a tokenization pilot program in July, and the Securities and Exchange Commission (SEC) granted an innovation exemption for on-chain trading facilities in September. However, the report notes that both initiatives are still in their early stages, making it premature to assess their impact on market circulation.
Currently, 82% of the outstanding issuance of tokenized stocks consists of offshore products from Binance, Onto Finance, Xstocks, and Robinhood, most of which are wrapper tokens. Wrapper tokens are issued based on actual stocks as underlying assets. Investors can benefit from price fluctuations and dividends but do not have direct voting rights like regular shareholders.
While regulatory reforms are underway in South Korea, offshore issued tokenized stocks remain outside the scope of regulation. Ahead of the revised Electronic Securities Act set to take effect in February next year, a legislative notice for subordinate regulations has been issued, but it does not include provisions for offshore issued products.
The report emphasizes that as cases of domestic companies like SK Hynix trading their stocks in token form increase overseas, South Korea's regulations should consider these transactions.
Jisung Jeong, a researcher at DigitalX's research center, stated, "If the infrastructure for issuing tokenized stocks is not established in South Korea, the trading of tokenized Korean stocks will take root outside the scope of domestic regulations. The institutionalization of the tokenized stock market depends more on connecting rights, liquidity, collateral, and reference prices with consistent rules than on hastening issuance."
* This article has been translated by AI.
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