Today Singapore’s SBI Digital Markets (SBIDM) signed a memorandum of understanding with Korea’s Kyobo Securities around security token offerings (STO). SBIDM is an indirect subsidiary of Japan’s SBI Group, which is very active in the tokenization arena. Together the two companies want to use their ecosystems in the Korean and global markets to explore real world asset tokenization, particularly in Europe and Asia, which have greater legal certainty.
While one could pigeonhole SBIDM as a tokenization firm, it doesn’t just provide a technology solution. Advisory is a big part of its business, and it also offers complimentary services such as custody.
With SBIDM’s home in Singapore, its Japanese heritage and Thailand’s SCB 10X as an investor, the company already has a pan Asian outlook which is extended by its Kyobo collaboration.
The Japanese STO market
However, each jurisdiction is a little different, often driven by regulations. For example, to date the Japanese tokenization sector is more active than other countries but has three distinctive features.
So far there’s been an emphasis on real estate, although that is likely evolving with more bond issuances expected. Incumbents dominate the STO sector, even if there’s plenty of innovation. For example, Mitsui & Co Digital Asset Management has a real estate tokenization offering, Alterna, that it is marketing directly to consumers without using brokers.
In Japan security tokens use permissioned blockchains, with MUFG’s Progmat and Nomura’s BOOSTRY / iBet for Fin as the leading offerings. With the two dominant platforms, the ecosystem is less fragmented than in other jurisdictions. There are public blockchain initiatives, and a huge amount of web3 activity, but so far it’s quite separate from the STO activities.
The Korean tokenization scene
In many ways, Korea’s market is the opposite. Its emphasis has been almost entirely on web3 activity and the tokenization of alternative assets such as art, commodities and intellectual property. There’s a vibrant startup scene with a focus on public blockchains.
Many of the incumbent brokers are developing STO services, some as consortia, others as standalone offerings. Most are building ecosystems involving several startups.
Kyobo Securities is working as part of a consortium. Last year it invested in a startup Lucent Block, which has a direct-to-consumer real estate security token app, “Own”. Hana Securities and Industrial Bank of Korea also invested. Other Kyobo investments include art platform Tessa and FIX, a cartoon funding solution.
The latest partnership follows a deal signed last month between the parent firms, SBI Holdings and Kyobo Life, which mentioned tokenization and security tokens.
