Korea Exchange to Create Separate Security Tokens Market
A separate security tokens market will be created in South Korea and operated by the Korea Exchange.
The South Korean government is set to announce guidelines for security tokens before the end of 2022, with a pilot market and regulatory sandbox to be launched beforehand. This move signals a shift towards greater institutionalization of the security token industry in South Korea. With these new guidelines, South Korea is setting itself up to be a major player in the security token industry. The country's forward-thinking approach will no doubt attract more businesses and investors to the space.
The financial regulator in South Korea has released a report on the potential for security tokens. The report is the result of a seminar held by the regulator, along with the financial supervisory service, the stock exchange, and the capital market research institute. The seminar discussed the national strategy on security tokens issuance and distribution.
The FSC's move to draft separate guidelines for non-standardized securities issued via blockchain is a positive step that will help support the sound development of the market and industry. Having clear legal definitions for these types of securities will provide much-needed clarity for market participants and help to ensure a fair and orderly market.
The FSC's announcement of the guidelines for security tokens in the fourth quarter of 2022 will be an important step forward in the development of the security token industry. The establishment of the "Security Token Discipline System" will provide a framework for the regulation of security tokens and help to ensure the safety and stability of the market.
The digital securities market in Korea will be a highly regulated and well-organized marketplace, with the Korea Exchange operating the market and the Korea Securities Depository assessing and registering tokens before they are listed. In the first stages, the regulator will allow over-the-counter trading on a limited scale, ensuring that only quality tokens are traded. This will create a safe and efficient market that will attract both domestic and foreign investors.
The South Korean government's announcement is another step in its regulatory initiatives to promote the cryptocurrency market. These initiatives began with the proposed enactment of the Metaverse Industry Promotion Act, which would foster the development of Metaverse in South Korea. The government's plan is to set up a comprehensive general cryptocurrency framework by 2024.
