On Wednesday, three major Korean securities firms, KB Securities, Shinhan Investment & Securities and NH Investment & Securities, announced a consortium for digital securities. Each already started working separately on security tokens.
Together they hope to share costs and gain economies of scale to attract more issuers for security token offerings (STOs). Additionally, by sharing the same distributed ledger, they aim to reduce fragmentation. In some jurisdictions, multiple digital securities platforms have created silos that are not interoperable. And if other securities firms join the consortium, it will enhance these benefits even more. They also hope to establish industry standards.
“Through the cooperation of the three securities companies, we will bring about great changes in the security token market,” said the companies in a joint statement. They continued, “We will lead the Korean financial market by opening a new financial paradigm.”
As we’ve reported previously, the Korean focus has been more on web3 asset tokenization targeting retail investors rather than institutional issuers.
Turning to the existing activities of each firm, all three had already developed alliances but this consortium takes things a step further.
The three firms’ digital securities initiatives
Last year KB Securities set up a standalone firm and formed the ‘ST Owners’ ecosystem. Its vision is to “enable consumers to own everything in the world.” Members include an art firm, an exhibition company and a real world asset issuance and distribution platform. Another member is SK C&C, the tech arm of SK Group.
It has been working with blockchain startup Lambda256 on building its platform. In August 2022, KB Securities invested in Singapore’s ADDX, a digital securities issuer and exchange and one of the leading startups globally in the sector.
As previously reported, Shinhnan Investment & Securities formed an STO Alliance earlier this year. It views it as an ecosystem of financial companies, tech firms and issuers and hopes to develop use cases. Around the same time, it ran a proof of concept (PoC).
Turning to NH Investment & Securities, its alliance is the ‘STO Vision Group‘. It frames the group as a consultative body and includes several fractional ownership and asset valuation firms. We believe it already involves several banks – Shinhan, Woori and Industrial Bank of Korea as well as some local banks.
In August NH Investments launched an “Investment Contract Securities All-in-One Service“. The offering provides a combination of advisory services, technical help, trust creation and fund transfer services. It started by working with an art sculpture investment company, Together Art.