South Korea’s financial industry anticipates a booming Security Token Offerings (STO) market, projected to reach $287 billion by 2030. Major banks in the country are keen to enter this emerging sector, with the domestic market predicted, as per EDaily, the Hana Financial Group’s Management Research Institute, to grow to nearly $27 billion next year alone.
Responding to the government’s relaxed regulations on STOs, financial firms are gearing up to offer STO products. Regulated firms will have the freedom to engage in STO projects, and industry insiders expect a swift entry of financial companies into the market.
To test the waters, Seoul plans to establish a regulatory sandbox supervised by the Financial Services Commission (FSC), where selected firms can issue and distribute tokenized securities.
However, banks are forming an STO alliance, seeking a more definitive green light. The alliance includes major players such as Nonghyup Bank, Suhyup Bank, and Jeonbuk Bank, while three prominent banks—Industrial Bank of Korea, Shinhan Bank, and Woori Bank—joined recently.
The potential for STOs in South Korea is immense, with projects involving tokenized real estate, artwork, and music copyright expected to debut. While some caution that banks may have to wait until 2025 to fully access the STO market, regulators are working on relevant legislation and aim to legalize STOs by the end of next year at the earliest.
In a related development, Shinhan and Kookmin banking groups have already begun developing STO trading platforms, showcasing their commitment to this evolving sector. The stage is set for South Korea to explore the vast opportunities presented by security tokens.
