South Korean Brokerage Firms Form Consortium for Tokenized Securities

Key Takeaways

KB Securities, NH Investment & Securities, and Shinhan Investment Corporation form a consortium for tokenized securities.

The consortium aims to build a common infrastructure and expand the scope of strategic business models.

The agreement was signed on September 26, 2023.

Consortium Formation

KB Securities, NH Investment & Securities, and Shinhan Investment Corporation announced on September 27, 2023, that they have formed a consortium to jointly enter the tokenized securities market. The three firms have been actively involved in the tokenized securities business and have individually developed systems for issuing tokenized securities, discovering investment products, and forming blockchain committees.

Strategic Collaboration

The consortium was formed as the firms recognized the limitations of market expansion when operating individually. The presidents of the three companies—Jung Young-chae of NH Investment & Securities, Park Jung-rim of KB Securities, and Kim Sang-tae of Shinhan Investment Corporation—signed a business agreement on September 26, 2023, to formalize the consortium.

Objectives and Plans

The consortium aims to not only build a common infrastructure but also to extend the scope of strategic business models. They plan to collaborate on various aspects including tokenized securities common infrastructure, distributed ledger verification, policy coordination, and the discovery of business models for issuing and distributing tokenized securities.

Cost Efficiency and Market Strategy

One of the key strategies of this collaboration is to achieve cost efficiency and economies of scale for both issuers and investors. By forming a common distributed ledger, the consortium aims to reduce construction and operational costs, allowing the firms to focus more on the tokenized securities market.

About

KB Securities has been a pioneer in the field, having developed and verified a system for issuing and distributing tokenized securities. NH Investment & Securities has been supporting the entire process from issuance to liquidation through its 'All-in-One Investment Contract Securities Service'. Shinhan Investment Corporation has been building core competencies in the tokenized securities business through various proofs of concept.

The consortium stated that their collaboration "will bring significant changes to the tokenized securities market" and "lead the Korean financial market into a new paradigm."

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