South Korea-based securities firm Hana Securities plans to launch a security token offering (STO) platform in the second half of 2024.
The securities firm is teaming up with Itcen and INF Consulting to offer technical support for the proposed STO platform. Per the official announcement, INF Consulting and Itcen have a streak of “conceptualizing to building platforms” using blockchain technology.
Hana Securities says the platform will offer robust functionalities, including managing STOs from issuance to circulation. The firm is eyeing a full-scale rollout for the STO platform in the second half of 2024, throwing its weight behind racking up a waitlist of firms for a blistering start to life.
The firm’s latest collaboration follows several key partnerships with several companies, including Print Bakery, Danal Entertainment, and Oasis Business, which it says will bring it one step closer to its STO ambitions. In September, Hana Securities announced its participation in the Next Finance Initiative (NFI) consortium, teaming up with SK Telecom and Mirae Asset Securities.
STOs are digital representations of mainstream financial instruments like debt, bonds, equities, and intellectual property.
In recent months, STO activity in South Korea has surged to new highs, with several entities dipping their toes in the industry. The Industrial Bank of Korea, Woori Bank, and Shinhan Bank—three of the top five largest South Korean banks—joined an STO consortium initiated by NongHyup Bank to explore the offering.
Analysts say the rise of STO consortiums in South Korea can offer solutions to the nagging challenge of fragmentation, reduce costs, and encourage interoperability. Aware of the rising interest, South Korea’s Financial Services Commission (FSC) disclosed that existing capital market rules will be applied to STOs.
“Under the Capital Markets Act, the relationship between the concept of securities and the form of securities issuance can be likened to food. The food does not change no matter what container it is served in,” said the FSC. “In other words, even if the form of issuance changes, the nature of securities does not change.”
STOs garner significant interest
Outside of South Korea, the concept of STOs is steadily gaining traction with a heavy focus on institutional investors. Unlike South Korean consortiums with an affinity for public blockchains, other jurisdictions are focused on private ledgers and tokenizing conventional securities.
In early November, Taiwan’s Financial Supervisory Commission (FSC) issued an STO license to Cathay Securities, allowing the firm to roll out its offering to investors. Despite the license, Cathay Securities has to abide by several rules, including a fundraising limit of $4 million and two STOs per year.
“The approval to launch STO this time is to provide investors with more diverse investment options, and at the same time, it is a fundraising channel for non-listed and emerging companies and new innovative development models,” said Cathay Securities.
