South Korean brokerage Mirae Asset Securities plans to tap into the emerging security token business along with SK Telecom. Photo courtesy of Mirae Asset Securities

Rivalry to set up new ecosystem will get stiffer

Observers points out on March 30 that the sky is limit for the security token business, which is expected to become a buzzword in the not-so-distant future.

Such analysis comes after two business bellwethers in South Korea joined hands to tap into the security token business, which had been mostly sought after by startups.

Korea’s leading brokerage Mirae Asset Securities, and the country’s top mobile operator SK Telecom reached an agreement to build the Next Finance Initiative.

Under the alliance, the two corporations plan to set up a platform for enabling the security token offering (STO) of startups as an alternative to the traditional initial coin offering (ICO).

By issuing security tokens representing stocks, startups can go ahead with STO to raise funds instead of depending on private equity funds, venture capital, or ICO.

Observers expected that Mirae Asset and SK Telecom would eventually compete to become the mainstream platform for exchanging security tokens offered by startups.

“The U.S. financial authority appears to encourage more regulated STO instead of unregulated ICO. Things are almost the same in South Korea,” Digital Finance Research Institute chief Moon Young-bae said.

“After being offered, security tokens will be traded at separate exchanges. The competition to become a major exchange would be stiff among brokerage houses and high-tech companies.”

Moon, who is regarded as a top blockchain expert in Korea, said that the security token exchange would attract not only small-sized firms but also major conglomerates.

“No matter what company offers its security tokens, they will be traded at the dedicated exchange. Initially, startups will take advantage of the opportunity to raise funds,” Moon said.

“But big-sized corporations, which are already listed in the mainstream exchange, can forge ahead with STO to raise additional funds. Then, their security tokens will also be exchanged.”