Korea Securities Depository Launches Token Securities Test-bed Platform

Establishing a System Infrastructure
in Preparation for Token Securities Legalization

On June 25, the Korea Securities Depository (KSD) announced that it has successfully launched the 'Token Securities Test-bed Platform,' establishing a system infrastructure in preparation for the legalization of token securities.

According to proposed amendments to the Electronic Securities Act and the Capital Markets Act, token securities will be accepted as a form of securities issuance under the Electronic Securities Act, with distributed ledgers recognized as electronic registration account books. As the electronic registration institution, KSD will be responsible for managing the total volume of token securities. By collecting transaction information recorded on distributed ledgers and ensuring that the total issued volume and the total circulating volume of token securities are always consistent, KSD aims to protect investors.

To fulfill these roles, KSD implemented relevant business functions and infrastructure in a test environment and, in order to verify them with market participants, carried out the 'Token Securities Test-bed Platform Construction Project' for eight months starting in October of last year. Specifically, KSD decided on a method that involves direct participation as a node in all distributed ledgers in the market, and structured the platform into a total volume management system, a node management system, and a distributed ledger system.

During the project period, KSD accepted applications from securities firms and fractional investment operators to participate in testing, selected eight institutions as test participants, and verified the platform's functionality through two rounds of external distributed ledger linkage tests.

Going forward, KSD plans to enhance the test-bed platform and transition it to an operational environment in line with the passage and enforcement of token securities legislation. KSD will also revise subordinate regulations to ensure the smooth introduction of the token securities system.

KSD will continuously support linkage testing between distributed ledgers and the test-bed platform for participating institutions, and will establish and announce standards for business and system integration with the electronic registration institution to actively support participation in the token securities market.

This content was produced with the assistance of AI translation services.