Koscom, NH Investment & Securities Partner on Tokenized Securities Platform

Koscom and NH Investment & Securities are partnering on a shared platform and new business models as they prepare for the institutional rollout of tokenized securities, or STOs.

Koscom said on August 13 that it signed a memorandum of understanding with NH Investment & Securities on cooperation in digital assets and STO businesses.

Under the agreement, NH Investment & Securities will join the STO shared platform that Koscom is building. The two companies plan to jointly verify related systems and business processes in response to the launch of the STO framework and the expansion of the digital-asset market.

The partnership will focus on verifying systems and business processes using the STO shared platform, linking STO issuance with account management operations, developing new business models based on digital assets and STOs, and jointly responding to regulatory and market changes.

The companies will also examine ways to tokenize conventional securities such as debt and equity instruments. They plan to apply blockchain technology to the issuance and distribution of traditional securities to improve operational efficiency and explore new business opportunities.

NH Investment & Securities recently set up a digital-asset task force and has stepped up preparations for related businesses. The firm plans to use the task force to flesh out digital-asset business models and execution strategies, while expanding into areas such as the tokenization of conventional securities.

Koscom is building an STO platform that multiple financial firms can use jointly to reduce system-building costs and duplicate investment for brokerages in the early stages of the STO market. It is expanding cooperation with Kiwoom Securities, Daishin Securities, IBK Investment & Securities, Yuanta Securities, BNK Investment & Securities, DB Financial Investment, iM Securities, Meritz Securities, Kyobo Securities, DAOL Investment & Securities and Woori Investment & Securities.

Koscom is also testing related infrastructure. It has built STO issuance infrastructure with LG CNS and carried out a testbed demonstration on STO total-volume management with Korea Securities Depository. The company is also continuing technical verification to link digital assets with existing capital-markets infrastructure, including a proof of concept for STO settlement using stablecoins.

Yoon Chang-hyun, Koscom's chief executive officer, said reliable infrastructure that can connect market participants in a stable manner will be crucial for the STO market to fully take shape, alongside the competitiveness of individual financial firms. Combining NH Investment & Securities' capabilities in brokerage, investment banking and wealth management with Koscom's capital-markets IT and blockchain expertise will help verify the shared platform's stability and scalability and lay the groundwork for the STO issuance market, he added.

Bae Kwang-soo, chief executive officer of NH Investment & Securities, said the incorporation of digital assets into the regulated financial system could reshape not only issuance and distribution structures in capital markets but also the broader financial-services industry. The company will work with Koscom to proactively verify the infrastructure and business processes needed for the STO business and continue to identify opportunities to expand its capital-markets capabilities into digital-based financial services, he said.