"Pursuing KOSDAQ 3,000 Through STO"...Urgent Need to Build Infrastructure [Crypto Briefing]

According to The Financial News, the government and the political community have identified Security Token Offering (STO) as a key driver to usher in the "KOSDAQ 3,000 era" once the Korea Composite Stock Price Index (KOSPI) is firmly established at the 5,000 level. Policy efforts are being concentrated on fostering corporate-finance-type STOs that can broaden funding channels for small and venture businesses. With STO-related legislation completed last month, experts say it is now time to move into the stage of operating real-world infrastructure.
On February 1, according to the National Assembly of the Republic of Korea and industry sources, the Democratic Party of Korea's KOSPI 5000 Special Committee reported to President Lee Jae-myung over a luncheon on measures to improve the structure of the KOSDAQ market through STO. The committee was said to have focused on the fact that STO can go beyond fractional investment and provide small and venture companies with a new funding channel.
Market experts have therefore proposed a range of ways in which STO could help achieve the KOSDAQ 3,000 target. A core scenario is that unlisted startups secure growth capital through STO and then move on to an initial public offering on the KOSDAQ market. Other ideas include enhancing liquidity by tokenizing assets such as real estate and intellectual property held by KOSDAQ-listed companies.
Previously, the Financial Services Commission (FSC) also announced in its ministerial briefing that it would accelerate the development and testing of blockchain-based securities infrastructure. The main goal is to establish STO as a new funding tool for early-stage venture and innovative companies. In particular, the FSC is focusing on designing detailed systems such as disclosure rules and investor protection mechanisms so that investors can trade with confidence. This is seen as an effort to minimize the gap between legislation and market opening, while securing trust in the market at an early stage.
Globally, the clock for STO is moving even faster. The New York Stock Exchange (NYSE) is pushing a platform that would use blockchain-based infrastructure to trade tokenized stocks and Exchange-Traded Funds (ETF) around the clock, while enabling de facto real-time settlement through the use of Stablecoin and other tools, achieving T+0 settlement. Japan's SBI Group is likewise working to build infrastructure that supports 24-hour blockchain-based (on-chain) trading and real-time settlement for tokenized stocks and various financial assets.
In South Korea, amendments to the Financial Investment Services and Capital Markets Act and the Act on Electronic Registration of Stocks and Bonds related to STO passed the National Assembly of the Republic of Korea last month, laying the groundwork for legislation. However, the construction of distribution infrastructure remains a work in progress. Delays in key elements such as preliminary approval for an over-the-counter marketplace for fractional investments are raising concerns about losing the golden window of opportunity. With the domestic STO market expected to reach 367 trillion won by 2030, observers argue that follow-up enforcement decrees must quickly establish the principle of separating issuance and distribution, along with a robust investor protection framework.
An official from the securities industry commented, "Korea has cleared the major hurdle of legislating STO, but now it is a race of speed and content," adding, "Only when distribution infrastructure that allows real money to flow is up and running, and products are in place that can genuinely connect growth capital to small and venture businesses, will a soft landing into the KOSDAQ 3,000 era be possible."
elikim@fnnews.com Kim Mi-hee Reporter