'2 Years of Stagnation, Finally Passing the National Assembly?'—Token Securities Stocks Rising on Expectations

Stocks related to token securities (ST) have risen one after another. This is due to expectations that the stalled process of incorporating ST into the institutional framework may accelerate as the National Assembly is set to begin discussions on the legislation as early as the beginning of this month.

On the 4th in the KOSDAQ market, K-Auction closed at 5,010 won, up 8.44%. K-Auction, the leading art auction company, is pursuing fractional investment and an ST business. The fintech company Finger, which possesses ST platform technology, increased by 7.17%. Galaxia Moneytree (6.86%), Galaxia SM (6.19%), and Seoul Auction (4.76%) also saw their stock prices rise.

These companies saw their share prices rise due to expectations for the National Assembly's discussions on the ST bill. According to securities industry sources, the National Assembly's Political Affairs Committee plans to hold a bill review subcommittee during the provisional assembly, which convenes from the 6th, to discuss amendments to the Capital Markets Act that will provide a basis for incorporating ST into the institutional framework. Last month, Min Byung-deok, a Democratic Party lawmaker, also mentioned the possibility that the ST bill could be addressed this month.

Token securities refer to securities issued using blockchain technology that allow various rights—such as copyrights, intellectual property (IP), real estate, and artworks—to be tokenized and traded. If token securities and fractional investments are institutionalized, both tangible and intangible assets can be liquidated in a fractional investment format, with each fraction issued and circulated as a token security.

The government has been pushing for the institutionalization of token securities since 2023, but attempts so far have made little headway. The institutionalization of fractional investment has also been delayed, repeatedly deprioritized in the National Assembly's agenda. The main authority, the Financial Services Commission, also pledged early this year to legislate ST in the first half of the year, but timely discussions failed to materialize due to the early presidential election, among other reasons. An official from the Political Affairs Committee explained, "There wasn't a major difference of opinion between the parties, but since it's not a key issue, it didn't make the immediate priority list."

In South Korea, securities firms and various startups are pursuing token securities businesses. Some have even built platforms to handle issuance or distribution. An official from a securities company said, "We originally expected the institutionalization to be completed last year so that we could launch a pilot service, but since discussions made no progress, the business is essentially on hold," adding, "If uncertainty disappears, the market could be fully activated."

Overseas, sentiment around the ST market is growing. Coinbase recently announced during its Q2 earnings report that it plans to support trading of tokenized versions of US stocks, enabling stocks to be split and traded 24/7.

At the end of June, Robinhood launched a tokenized equity trading service for major unlisted companies such as OpenAI and Anthropic. Major established financial firms such as Goldman Sachs, BlackRock, Franklin Templeton, and J.P. Morgan are also entering the tokenized asset market, including tokenized money market funds (MMFs).

Reporter Seon Han-gyeol always@hankyung.com