The South Korean STO Bill Passes First Parliamentary Review, Tokenized Securities Market Expected to Launch in the First Half of Next Year

On November 24th, according to Naver, South Korea has expedited the institutionalization of Security Token Offerings (STOs) by amending the Electronic Securities Act and the Capital Market Act. These amendments have passed through the subcommittee of the Legislation and Judiciary Committee of the National Assembly, laying the foundation for the opening of the STO market in the first half of next year. It is expected that the amendments will formally incorporate blockchain distributed ledger technology into the electronic registration system, enabling issuers to register and manage blockchain-based security tokens as electronic securities. At the same time, it will bring investment contract securities and non-monetary trust beneficiary securities, such as small-scale over-the-counter trading platforms, under regulation, providing a basis for the legal operation of fractional investment exchanges. If the bill is finally passed at the full meeting of the National Assembly next month, the tokenization and circulation of various physical assets such as real estate, art, and music copyrights will be able to proceed within the regulatory framework.