Capital markets News

Korea’s Woori Bank, NH NongHyup Bank progress tokenization platforms separately

korea security tokens tokenization

During the past year Korea’s banks and securities companies have started building token issuance platforms and collaborating on tokenization consortia. The institutions are forging ahead despite the delay in passing legislation to support security token issuance. This week Woori Bank signed a distribution deal with a secondary market operator and applied to participate in a regulatory sandbox. Additionally, NH NongHyup Bank reportedly received Won 1 billion ($732,000) in funding from the Korea Internet & Security Agency (KISA) to develop its token issuance platform. It’s expected to be ready by November this year.

In August last year Woori Bank entered into a ‘mutual cooperation council’ with Samsung Securities (Korea’s second largest brokerage) and SK Securities. The Finance 3.0 Partners (F3P) decided to collaborate to explore business models, ‘verify infrastructure’ and establish investment protection measures. It now appears that the infrastructure piece means they are building a joint token issuance solution.

Piece – Korea’s secondary market for security tokens

Last week Woori Bank signed a deal with Piece, the Korean fractional investment marketplace operated by Buysell Standards. Piece is entering the digital asset space and together they plan to offer two new security token products. One will provide financing to SME merchants, and another relates to shipping finance.

Buysell Standards already has agreements to promote security token offerings (STOs) with several brokerages, including NH Investment & Securities, KDB Infrastructure, Korea Investment & Securities, Shinhan Investment & Securities, and KB Securities.

Turning to NH NongHyup Bank, it is building a token issuance platform on its own, using the KISA funding.

“The issuance of token securities is a task that banks can perform regardless of the passage of the amendments to the Electronic Securities Act and the Capital Markets Act, so we are preparing quickly,” a representative of NH NongHyup Bank told Maekyung.

There are numerous security token consortia in Korea. Many are simply collaborations, but others are developing joint platforms. For example, KB Securities, NH Securities and Shinhan Securities are developing a common platform. However, Korea’s largest brokerage, Korea Investment & Securities, is building its own DLT issuance solution.