Last week Korea’s Financial Post reported that Koscom has expanded its tokenization platform ecosystem, KoSTO, with a dozen securities firms committed to joining. Almost a year ago we reported it was testing settlement with stablecoins and had signed up seven securities firms, with the goal of sharing tokenization infrastructure rather than small and medium sized firms needing to make the investment. The platform’s aim goes beyond token issuance, to distribution and settlement.
Koscom is a subsidiary of Korea Exchange which owns 76.6%, with 8% held by Korea Securities Depository and the balance by Korea Securities Finance and 14 other securities firms.
KoSTO will integrate with both the securities firms’ back offices and the Korea Securities Depository (KSD), the primary central securities depository in Korea. KSD is developing a blockchain system to aggregate data from issuances of securities on multiple blockchains, ensuring the total issuance matches expectations.
The KoSTO platform is expected to go live ahead of Korea’s revised securities legislation coming into force on 4 February 2027. One major legislative change is recognizing tokenized securities and bonds on distributed ledgers as equivalent to conventional securities. Secondly, the new legislation allows licensed intermediaries such as securities firms to engage with OTC trading of fractional real world assets (RWA) such as real estate or music. We explore the phased regulatory changes below.
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