South Korea Set to Unveil New Security Tokens Guidelines in 2022

Final Countdown: Security Tokens on the Horizon

Mark your calendars, folks! By the end of 2022, South Korea’s Financial Services Commission (FSC) is ready to drop the much-anticipated guidelines for security tokens. This comes as the country gears up to launch a pilot market featuring a regulatory sandbox, setting the stage for a whole new world of digital finance.

The Players in the Game

Recently, the FSC collaborated with a powerhouse lineup of institutions including the Financial Supervisory Service, Korea Exchange, Korea Securities Depository, and the Capital Market Research Institute. Together, they gathered for a policy seminar that stirred up discussions on the nation’s strategy for the issuance and distribution of security tokens.

Why the Fuss? Legal Definitions Needed!

Despite the rapid advancements in capital markets and electronic securities, the current South Korean legal framework is lacking when it comes to non-standardized securities issued via blockchain. The FSC recognized this gap and is moving quickly to draft guidelines aimed at nurturing the market’s healthy development.

What’s Next? The Framework Unfolds

In the fourth quarter of 2022, watch for the FSC to unveil those vital guidelines. Following that, expect the establishment of a “Security Token Discipline System” that will involve revisions to existing laws, including the Electronic Securities Act and the Capital Market Act. Let’s just say, the legal gears are turning, and this train isn’t stopping!

Trading Dynamics: A New Era Awaits

The digital securities market will be headed by the Korea Exchange, while the Korea Securities Depository will take on the crucial role of assessing tokens before registration and listing. Initially, trading will likely be over-the-counter and on a small scale, but the potential for growth is massive.

Crypto Crusade: More Than Just Tokens!

This move is just one piece of the puzzle. The newly-elected government in South Korea is on a mission to promote the crypto market. Hot on the heels of the security token guidelines, local lawmakers have proposed a Metaverse Industry Promotion Act to foster the burgeoning Metaverse scene. Plus, whispers of a comprehensive crypto framework by 2024 have surfaced, promising to keep South Korea at the forefront of crypto advancements.