• Several South Korean firms are reportedly preparing to launch security token offering (STO)-related services in 2021.
• The Financial Services Commission (FSC) is expected to make an announcement about STOs on January 19.
• Busan, in particular, is hoping to make STOs a key part of the city-run Digital Assets Exchange project.

The South Korean crypto sector is abuzz with reports that multiple domestic companies are preparing to launch security token offering (STO)-related services this year. The news follows the Financial Services Commission’s (FSC) announcement that it would make an announcement regarding the “distribution and issuance of security tokens” on January 19, 2021.

An STO, also known as a security token offering, is a form of fundraising that involves issuing digital tokens that represent securities such as stocks and bonds. The FSC has recently outlined new rules for the issuance of digital tokens, which could pave the way for the launch of STOs in the near future.

The news has been welcomed by a number of domestic securities companies, which have reportedly been “busy preparing digital asset platforms” that can handle and/or issue tokens. The City of Busan, in particular, is hoping to make STOs a key part of the city-run Digital Assets Exchange project. The project is being developed in conjunction with a number of top international crypto exchanges, including Binance.

The city has been granted special regulation-free status in the sphere of blockchain technology, and a number of the private-sector projects it has nurtured in its sandbox space are related to STOs, including a tokenized real estate project. The city hopes that its efforts to launch STOs will eventually help it become a global hub for digital assets.

In addition to the launch of STOs, the FSC is also expected to provide guidance on the taxation of digital assets and the management of digital asset exchange operators. The FSC has previously emphasized the importance of protecting investors and preventing money laundering, and it is likely to impose some restrictions on the issuance and trading of digital tokens.

It remains to be seen what the exact details of the FSC’s announcement will be, but it appears that many firms are confident that the FSC will not throw up too many hurdles in their path. If the regulator does indeed give the go-ahead for the launch of STOs, then South Korea could become a major hub for digital assets in the near future.