Lee Euhwunuk: "Regulations on Issuance, Distribution, and Disclosure to Be Improved for Diverse STOs"

Token Securities (STO) Task Force Kick-off Meeting

"Preparations Underway for Introducing On-Chain Settlement"

The Financial Services Commission is working to improve regulations on issuance, distribution, and disclosure to allow for the emergence of a wide range of token securities (STOs).

Eokwon Lee, Chairman of the Financial Services Commission, attended the Joint Public-Private Token Securities Consultative Group Kickoff Meeting held on the morning of the 4th at the Government Seoul Office in Jongno-gu, Seoul, to discuss the detailed design of the token securities system and infrastructure, presenting the direction for the institutionalization of token securities. Financial Services Commission

On March 4, Yieuhwunuk, Chairman of the Financial Services Commission, announced this at the 'Token Securities (STO) Consultative Body Kick-off Meeting' held at the Seoul Government Complex. This meeting was convened to discuss the detailed design of the STO system and infrastructure, with participation from public officials, related organizations, and private-sector experts, including Hwang Sunoh, Deputy Governor of the Financial Supervisory Service, Lee Sunho, CEO of the Korea Securities Depository, and Kim Jonghyun, Chairman of the Korea Fintech Industry Association.

The push to improve regulations is aimed at creating a digitally innovative financial ecosystem with diversity and scalability. Chairman Yieuhwunuk stated, "The range of investment products is expanding, including securities that allow investors to share copyright royalties by investing in a singer's music, and securities that distribute proceeds from Korean beef auctions through investments in livestock farms. If STOs are newly introduced, we will be able to efficiently implement new types of securities and customized infrastructure through blockchain-based smart contracts."

The Commission will also work on overhauling the securities settlement system, including on-chain payments. Chairman Yieuhwunuk said, "With on-chain payments, where STOs and stablecoins as payment methods are settled on the same blockchain, we can maximize payment efficiency. We will consider the connectivity with stablecoins and future scalability in designing the STO system and infrastructure."

Attempts to introduce on-chain systems are already underway overseas. These systems aim to increase settlement efficiency by enabling T+0 settlement, where transaction proceeds are withdrawn on the same day as the sale of securities.

Chairman Yieuhwunuk also emphasized, "We will establish a customized investor protection framework that reflects the technical characteristics of blockchain." He added, "Investor protection is the fundamental principle of capital market regulation. We will seek investor protection measures tailored to STOs, such as advancing investor protection systems through technological mechanisms like smart contracts."

The STO consultative body will be organized into four divisions: technology and infrastructure, issuance, distribution, and settlement, and will operate on a continuous basis. In addition, an open private advisory group will be operated to enhance the expertise of the system design. Through these measures, the direction for institutional design is expected to be established within the first half of this year.

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