Japan’s SBI Group and Korea’s Kyobo Life Insurance Group partnered to explore business opportunities relating to digital finance and technology. Given the partnership is only just starting, the announcement was short on detail, apart from the specific mention of tokenization and security tokens.
SBI and Kyobo have an existing relationship for a venture capital fund covering the FinTech sector in Southeast Asia. Under the latest agreement, SBI may get involved with Korean ecosystems and consortia relating to Security Token Offerings (STOs). That’s in addition to sharing technology capabilities and know how.
Tokenization aims to make the investment process more efficient and transparent. It has the potential to expand the pool of potential investors by lowering the investment denominations and using public blockchain.
Japan’s tokenization sector
Arguably the security token market in Japan is a little more developed than Korea’s. Japan has two established issuance platforms, Progmat and ibet for Fin (BOOSTRY), plus a regulated secondary market, the Osaka Digital Exchange (ODX). Large institutions founded all these platforms. SBI started ODX and is a minority investor in both the issuance platforms. SBI set up a subsidiary in Singapore, SBI Digital Asset Holdings, for its global tokenization initiatives.
To date security token issuances in Japan have been dominated by real estate tokens. Some offerings go direct, but most are via broker intermediaries such as SBI Securities.
Korea’s security token initiatives
Korea’s marketplace is more fragmented with startups taking the lead and securities firms as followers. The offerings appear more consumer focused and there’s an emphasis on the use of public blockchains, compared to Japan’s use of private ones given regulator concerns.
Looking at Kyobo, its securities arm Kyobo Securities is taking the lead in its security token activities. It has been working on a consortium of securities firms. Last year it invested in Lucent Block, which has a real estate security token app, “Own”, that targets consumers directly. Other institutions that invested in Lucent Block alongside Kyobo included Hana Securities and Industrial Bank of Korea.
Kyobo Securities followed up the investment by partnering with Lucent Block. It says it plans to create regional focused real estate investment products. Additionally, it partnered with fractional art platform TESSA and FIX which plans to fund new cartoon creations in innovative ways.
Meanwhile, securities firms have created several consortia in Korea, although some institutions are building their platforms internally.
