Capital markets News

If security tokens issued on multiple blockchains, Korea Securities Depository has the answer

korea security tokens depository ksd

Yesterday the Korea Securities Depository (KSD) announced plans for a securities token platform as part of its medium to long term roadmap. It broached a novel topic: what happens when an organization issues a security on multiple blockchains?

“The KSD will do its best to help securities tokens and fractional investment tokens settle in the market without difficulty,” said KSD CEO Lee Soon-ho, according to Korea Times.

In Korea, the KSD is a public body rather than a commercial entity. The Korean government recently announced measures for regulating token securities and has started to update laws.

Issuing a security across several blockchains

The KSD also published a few details on its website. One of the roles the KSD sees for itself is managing the total amount of the issuance. This is because it envisages a company issuing securities across multiple blockchains. 

The Google translation refers to the “Establishment of a total amount management system for distributed ledger that can be supported in connection with multiple issuing platforms (mainnet).”

Most security tokens are currently issued on a single platform. But larger ones, especially those targeting retail investors, will want to be available on multiple public blockchains. For example, in the U.S., Franklin Templeton has an on chain money market fund that was originally issued on the Stellar blockchain, reaching a market capitalization of $270 million. In May, it launched it on the Polygon blockchain as well.

While a blockchain can play the role of registry for the security, it gets messy to keep track when it’s issued across several blockchains. So a CSD can potentially play the role the KSD describes.

The KSD is particularly interested in supporting the tokenization of real estate, music and copyright.

Meanwhile, Busan is launching the Busan Digital Asset Exchange, which will support a combination of cryptocurrencies and tokenized real world assets, including commodities. It’s expected to announce its detailed plans soon.

Several Korean securities firms are working on tokenization platforms. Last month Shinhan Investment & Securities revealed it is working with tech provider Lambda256 and plans to launch its tokenization platform next year. KB Securities and Kiwoom Securities are expected to launch later this year.

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