South Korea Prepares for Token Securities Issuance

03/06/2023 02:07 • Crypto & Markets • 68 views

On March 6, Lee, head of the Capital Market Department of the Korea Financial Commission (KFC), announced that amendments to the Electronic Securities Law and the Capital Market Law would be submitted in the first half of this year to lay the foundation for the issuance and distribution of token securities (ST0) in the first half of this year. Lee predicted that according to the legislative discussion of the National Assembly, the Token Securities (ST0) system could be implemented as early as the end of 2024. It is reported that the amendments to the Electronic Securities Law include the recognition of distributed ledger technology as one of the ways to digitize securities and the establishment of a new issuer account management institution. The amendments to the Capital Market Law include the establishment of over-the-counter brokerage business and the issuance of non-typical securities, such as investment contract securities and non-monetary trust beneficiary certificates.

The amendments to the relevant laws of ST0 in South Korea will be submitted in the first half of this year, and will be implemented at the earliest by the end of 2024

Interpretation of the news:

South Korea’s financial regulators are preparing to lay the foundation for the issuance and distribution of token securities (ST0) in the country. This announcement was made by Lee, the head of the Capital Market Department of the Korea Financial Commission (KFC) on March 6. He revealed that amendments to two major laws, the Electronic Securities Law and the Capital Market Law, are expected to be submitted in the first half of this year. These amendments are aimed at facilitating the issuance and trading of digital securities.

The proposed amendments to the Electronic Securities Law will recognize distributed ledger technology as one of the ways to digitize securities. This implies that blockchain technology will be formally recognized as a legitimate means of issuing securities in the country. Moreover, a new issuer account management institution will be established to ensure proper management of digital securities. This institution will be responsible for managing the accounts of issuers and ensuring their compliance with regulatory requirements.

The amendments to the Capital Market Law, on the other hand, will establish over-the-counter brokerage business and the issuance of non-typical securities, such as investment contract securities and non-monetary trust beneficiary certificates. This will provide a regulatory framework for the issuance and trading of token securities in South Korea.

Lee further predicted that the Token Securities (ST0) system could be implemented as early as the end of 2024, depending on the legislative discussion of the National Assembly. This signals a positive development towards the widespread adoption and acceptance of digital securities as mainstream investment vehicles in South Korea.

In conclusion, the proposed amendments to the Electronic Securities Law and the Capital Market Law indicate that South Korea is moving towards a more digital and secure means of issuing and trading securities. The recognition of distributed ledger technology and the establishment of a new issuer account management institution will provide a solid foundation for the issuance and trading of token securities in the country. This move will also position South Korea as a crypto-friendly nation, attracting foreign investments and startups in the blockchain and cryptocurrency industries.

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