Nonghyup Bank Completes Development of Token Securities Issuance Platform

Although the banking sector, led by NN Nonghyup Bank, is speeding up the token securities business, critics point out that the legal basis for institutionalization is sluggish.

Despite the banking sector's enthusiasm for token securities, led by NN Nonghyup Bank, the institutionalization process is being hampered by a lack of legal framework. Token securities, which involve dividing shares of real and financial assets into tokens using blockchain technology, are widely regarded as the next frontier in the financial industry.

Both the ruling and opposition parties have proposed legislation to institutionalize token securities issuance. However, due to minimal interest from political circles, the passage of the bill is expected to take a significant amount of time. This uncertainty is seen by banks as a roadblock to the project's full implementation. Some banks have completed preparations for the token securities business and are continuing to test without fail.

Nonghyup Bank recently completed the development of "STOG Generation," a platform for issuing token securities, according to the financial sector on the 22nd. Preparations are being made simultaneously for the business and technology sectors.

Nonghyup Bank will finally choose a fragmented investment operator to participate in the token securities issuance platform next month. The chosen operators will be able to begin using the platform within the year. Nonghyup Bank's token securities business is expected to be further defined with the selection of a participating operator.

"This is a stage for sculptural investment operators to enter the platform," said an official from Nonghyup Bank. "We are continuing discussions on related matters with several companies."

Nonghyup Bank was chosen earlier as an operator for the Korea Internet & Security Agency's blockchain diffusion project under the Ministry of Science and ICT and began constructing the platform before other financial institutions. KB Kookmin Bank, Shinhan Bank, Woori Bank, and IBK Industrial Bank are also preparing for the token securities business, according to reports.

The issue is that legalization, which will accelerate the token securities business, is likely to be difficult to achieve. According to politicians, Min Byung-duk of the Democratic Party of Korea recently proposed amendments to the Capital Markets Act and Electronic Securities Act, which aim to legalize the issuance of token securities.

Earlier, Kim Jae-sup, a member of the People's Power Party, introduced a similar bill. The legal basis for issuing token securities, the establishment of an issuer account management agency, and the creation of an over-the-counter brokerage system for investment contract securities and beneficiary securities are all critical components.

Both ruling and opposition party lawmakers have proposed legislation to institutionalize it, but political attention is still minimal. A bill was also introduced in the 21st National Assembly, but it was abandoned without meaningful discussion.

"Banks are eager to enter the token securities business to generate new revenue streams, but it is disheartening that there has been no supporting system in place for an extended period of time," said an official from a commercial bank.