Korea’s Financial Services Commission (FSC) has designated Kyobo Life as a trust business for the purposes of issuance of security tokens to finance aircraft engines. It aims to fractionalize the cost of acquiring aircraft engines. The company will act as the trustee responsible for the real world assets (RWA), in this case the aircraft engine, and will issue trust beneficiary certificates. Galaxia Money Tree will then tokenize these certificates on its tokenization platform as part of a security token offering (STO).
Hence, instead of aircraft engine financing that is syndicated to a few institutional investors, there will be small investments by private individuals.
In late 2023 a security token consortium was formed for the purposes of aircraft financing with Galaxia handling the overall management. Shinhan Securities and Eugene Investments are consortium members to enable the distribution of the security tokens. It also includes aviation analytics firm Cirium and VMIC, a local aircraft leasing firm.
VMIC’s role is to act as asset manager. It will source the engines, lease them to airlines, and manage any subsequent sale, with the token holders receiving most of the leasing income. Galaxia, Kyobo and VMIC inked a collaboration with Korea Aviation Association and Korea Aviation Services, presumably to engage with airlines who need new engines.
Given the tokens will be on a public blockchain, investors will be able to track the status of the engines, which is presumably where Cirium comes in as a data analytics provider.
Galaxia Money Tree has extensive plans for its tokenization platform. It previously signed deals to tokenize various assets including:
- Carbon Emission Tokens (Suhyub bank and others)
- Renewable Energy Tokens (SK Securities and others)
- Tokes for electric vehicle charging infrastructure.
Last year Kyobo signed tokenization deals with Japan’s SBI and its Singapore subsidiary SBI Digital Markets.
