South Korea’s top financial regulator announced Tuesday a plan to open a separate digital securities market similar to the KOSPI (Korea Composite Stock Price Index), in a move to institutionalize and promote cryptocurrencies.

Fast facts

  • The planned digital securities market will accommodate securities tokens, representing ownership rights or asset value using blockchain technology. However, the tokens will be required to be registered in the format of electronic securities.
  • The Financial Services Commission (FSC) plans to have the Korea Exchange (KRX) operate the digital securities market, and have security companies broker the trades.
  • The proposal calls for the Korea Securities Depository to examine and register the listing of security tokens applied by the issuer or through a brokerage. The depository will also manage the total volume of listed tokens.
  • For investor protection purposes, tokens will be distributed in the same method as existing securities. It will also allow over-the-counter transactions on a limited scale during the early stages of the market.
  • Earlier this year, President Yoon Suk-yeol’s administration announced that it will push to allow initial coin offerings (ICOs) and security token offerings (STOs).
  • Major securities companies in South Korea, including NH, KB and Shinhan, are each reportedly looking to establish digital asset exchanges in the first half of 2023.