No major partisan differences, legislation likely to speed up Political Affairs Committee expected to discuss in August Industry: "Swift passage needed" After being overshadowed by the issue of the Korean won stablecoin, the legislation for Security Token Offerings (STO), which had not received much attention for a while, is expected to gain momentum again in the second half of the year. According to political circles and others on the 17th, a consensus has recently formed in the National Assembly to process STO-related bills, which had been pending for a long time, within this year. With minimal disagreement between the parties and years of ongoing discussion, there is an expectation that swift legislation is possible. An industry representative stated, "Both parties consider digital financial innovation a top priority, so it is highly likely that STO legislation will be pushed forward first." He added, "With the schedule including a hearing in July and a parliamentary audit in September, the only time when the Political Affairs Committee can realistically operate is in August, and this is when discussions are expected to take place." The STO bill was initially proposed in 2023, but was automatically discarded due to the expiration of the 21st National Assembly’s term. Since then, a bill with the same contents was reintroduced in the 22nd National Assembly, but discussions have yet to ramp up. Until last year, there was optimism that the legislation could be passed in the first half of 2025, but related discussions effectively came to a halt after the impeachment crisis. However, with the inauguration of the Lee Jae-myung Administration, which pledged to push for STO legislation, there is hope that the process will accelerate once the Political Affairs Committee resumes operation. Currently, there are a total of five related bills pending before the committee, including amendments to the Capital Markets Act and the Electronic Securities Act introduced by Min Byung-deok of the Democratic Party of Korea, as well as the "Token Securities Systemization Bill" proposed by Kim Jae-seop of the People Power Party. These bills must pass the subcommittee and a full committee meeting before they can be further reviewed for legal validity by the Legislation and Judiciary Committee. In fact, Min Byung-deok stated last April, "After the presidential election, STO legislation should be dealt with swiftly through the Political Affairs Committee." A source from the National Policy Planning Committee also said recently, "With the global STO competition accelerating, we must not delay domestic legislation any further." Globally, the competition to tokenize securities is already in full swing. Recently, cryptocurrency exchanges Kraken and Gemini launched tokenized stock products for European customers, featuring brands like Nike, McDonald's, and Starbucks; Bybit offered tokenized Brent Crude Oil futures products. In the United States, the financial services platform Robinhood unveiled the Ethereum-based Layer 2 "Robinhood Chain," building a system where tokenized stocks can be traded directly on the blockchain. Shin Beom-jun, chairman of the Token Securities Council at the Korea Fintech Industry Association, stressed, "STO already has an institutional foundation established through financial authority guidelines and National Assembly discussions. To stay in step with the global trend, swift passage of the bill is needed." Hwang Hyun-il, attorney at Sejong Law Firm, also noted, "It is important to minimize the grace period for prompt implementation of the new system."
July 17PiCK
