[Edaily Marketin Won Jae-yeon Reporter] The scope of preparations for security token offerings (STOs) by domestic securities firms is expanding beyond fractional investing to include traditional financial assets such as bonds, money market funds (MMFs), and mutual funds. The early market, which had centered on non-traditional assets such as art and real estate, appears to be shifting toward experiments that bring mainstream financial products onto blockchain infrastructure.

According to a report titled “Current Status of STO Preparations in the Securities Industry,” submitted by the Korea Financial Investment Association to the office of Rep. Park Sang-hyuk of the Democratic Party of Korea on the 1st, at least three out of the top 10 securities firms are pursuing plans to integrate structured financial assets—such as bonds, MMFs, corporate bonds, and funds—into the security token infrastructure. While discussions on tokenized securities in Korea have previously focused on fractional investments in non-traditional assets such as artworks, Hanwoo beef, and real estate, the scope of consideration is now broadening to include the issuance and management of existing capital market products on a distributed ledger basis ahead of the law’s implementation.

Strategies vary by securities firm and include building proprietary platforms, participating in overseas tokenization infrastructure, and collaborating on bond-type products. Korea Investment & Securities is moving forward with the development of its own tokenized securities issuance platform, which will include bonds and MMFs, and has recently distributed a request for proposal (RFP) to major operators to kick off full-scale preparations for the project. Mirae Asset Securities is preparing an integrated model that manages traditional assets—such as stocks and bonds—and digital assets on a single platform. Recently, following its issuance of a 1000억 won digital bond in Hong Kong—the first such issuance by a Korean financial institution—the firm has also joined a tokenization working group led by the U.S. Depository Trust & Clearing Corporation (DTCC), thereby gaining experience in the tokenization of structured assets in overseas markets.

Similar trends are emerging in the asset management sector. Mirae Asset Management has signed a business agreement with Ondo Finance to develop digital asset-based investment products and build a tokenized financial ecosystem. The plan is to start with U.S.-listed ETFs managed by Global X, Mirae Asset Management’s overseas subsidiary, and subsequently expand the scope of tokenization to funds listed in major markets such as Europe, Hong Kong, Japan, Canada, and Australia. However, the decision to begin experiments with overseas-listed ETFs rather than domestic ones stems from the fact that domestic regulations still prioritize the acceptance of unlisted and non-standard securities, meaning the tokenization of listed ETFs and standard securities—such as government bonds and money market funds (MMFs)—is not yet a legally open area.

KB Securities has set the on-chain tokenization of mainstream capital market assets—such as corporate bonds, funds, and trust beneficiary certificates—as a core strategic direction. Earlier this month, it reportedly signed a business agreement with the Canton Foundation and Wavbridge to explore the domestic introduction of distributed ledger-based financial products and the establishment of overseas distribution infrastructure. In addition, Shinhan Investment Securities is pursuing cooperation with the global RWA platform Etherfuse regarding “KTB,” a stable bond backed by Korean government bonds. While Shinhan is not directly issuing or selling the product itself, this appears to be an attempt to secure a role in asset procurement and management should the bond-type RWA market open up in the future.

The fact that the existing fractional investment market is limited in scale has influenced securities firms to turn their attention to the tokenization of traditional financial assets. According to the Financial Services Commission, the total transaction volume across the distribution channels of the four fractional investment sandbox operators that launched services in 2024 amounted to only approximately 14.5 billion won. While fractional investment focused on non-standard assets—such as art, real estate, and music—succeeded in attracting investor interest, the market was not large enough to warrant full-scale infrastructure investment by securities firms.

In contrast, structured financial assets—such as bonds, money market funds (MMFs), and mutual funds—already have established issuance and sales infrastructure within the existing capital markets. Earlier, in May, the financial investment industry also conveyed to financial authorities through the Tokenized Securities Council that it was necessary to establish a system enabling the tokenization not only of new types of securities but also of traditional securities such as stocks, bonds, and MMFs. From the perspective of securities firms, it is a more realistic choice to grow the market by starting with assets that have a broader investor base and relatively clear valuations rather than fractional investment.

In global markets, the tokenization of traditional financial assets has already become a central pillar of the market. “BUIDL,” the tokenized MMF from BlackRock, a major global asset manager, has surpassed $2.5 billion (approximately 3.8 trillion won) in assets under management, and the cumulative trading volume on the tokenized securities platform operated by RWA firm Ondo Finance exceeds $18 billion (27.99 trillion won). The Depository Trust & Clearing Corporation (DTCC), the New York Stock Exchange (NYSE), and Nasdaq have also begun experimenting with the tokenization of government bonds and listed stocks.

However, even after institutionalization, it will not be easy to immediately launch tokenized products based on structured financial assets such as bonds and money market funds (MMFs). This is because the structure of bundling multiple bonds or financial assets into a single product is even more complex than that of non-standardized assets, yet the establishment of detailed standards has not even begun. The Financial Services Commission (FSC) is reviewing a plan to issue products by bundling underlying assets of the same type within a certain range; however, details such as which assets will be permitted and how risks will be disclosed to investors are expected to be specified in subordinate regulations and guidelines scheduled for release in July.

Structured financial assets, in particular, are expected to face even greater challenges as they find it difficult to circumvent existing capital market regulations. For example, bonds are debt securities, and money market funds (MMFs) have strong characteristics of collective investment products; therefore, even if they are placed on a blockchain, they remain subject to regulations under the Capital Markets Act at every stage—from issuance and sale to management and custody. Since the structure does not allow for immediate commercialization simply because the token issuance infrastructure is in place, the tokenization of structured assets is likely to proceed in stages even after the law takes effect, in line with the pace at which the scope of underlying assets and the standards for distribution and settlement are established.

An official in the virtual asset industry stated, “For the tokenized securities market to grow, relying solely on fractional investments in art or real estate has its limitations,” adding, “Ultimately, it will be crucial to determine how to bring products—such as bonds, MMFs, and funds—that already have an established investor and issuer base in the existing capital markets onto the blockchain.”