Listing Experiment at European Blockchain Exchange…Can Tokenized Securities Become a Funding Alternative?

Tokenized Securities Illustration

As overseas blockchain exchanges embark on initial public offering (IPO) experiments that break from traditional methods, attention is focused on whether tokenized securities will establish themselves as a new pillar of fundraising.

According to the industry on the 12th, the French blockchain exchange 'Lise' is pursuing an on-chain IPO for ST Group, a French aerospace component manufacturing company. Subscriptions opened on the 9th (local time), and the listing offering process is currently underway.

This is known as Europe's first on-chain IPO case.

An on-chain IPO refers to a method where each share is digitized into a token and traded on a blockchain, with the entire process, from share issuance to trading, taking place on the blockchain.

This integrates functions that were previously handled by different institutions into a single infrastructure.

For small and medium-sized enterprises (SMEs) and venture companies that found it difficult to access traditional IPOs, this offers the advantage of raising capital faster and at a lower cost.

Tokenized securities refer to securities that manage issuance and distribution information using blockchain, the technology used in cryptocurrencies.

While similar to existing electronic securities in that securities are recorded in an electronic rather than paper (physical) format, tokenized securities are differentiated by using decentralized blockchain technology instead of a centralized registration and management system.

Tokenized securities are also gaining attention as a new fundraising channel in Korea.

The Financial Services Commission (FSC) has defined tokenized securities as a 'new fundraising method for SMEs and small business owners' and has uniquely included them in both national and key policy agendas within the digital asset sector.

Discussions are underway on methods such as pre-listing startups securing initial capital through tokenized securities and then proceeding to a KOSDAQ IPO, or KOSDAQ-listed companies tokenizing their assets to secure additional liquidity.

Institutionalization has progressed this year.

In January, amendments to the Capital Markets Act and Electronic Securities Act passed the National Assembly, laying the legal foundation. In February, two consortiums, KDX and NXT, received preliminary approval for fractional investment distribution platforms. Last month, a public-private joint consultative body was also launched to design the enforcement decree for tokenized securities-related legislation.

The Business Development Company (BDC), introduced last month, is a listed public fund that focuses on investing in unlisted venture and innovative companies. The venture capital industry is reportedly looking into ways to tokenize the equity held by BDCs into tokenized securities.

MOU between SK Securities and BuySell Standard for Tokenized Securities Market Activation

In line with the implementation of the system, product preparation efforts are also busy.

Last January, SK Securities [001510] and tokenized securities firm BuySell Standard signed a Memorandum of Understanding (MOU) for the issuance and market activation of tokenized securities.

The two companies plan to issue tokenized securities to support financing for SMEs and venture companies and promote asset securitization.

The use of tokenized securities is also gradually expanding in the capital markets of developed countries.

The New York Stock Exchange (NYSE) has completed the development of a trading platform for the trading and settlement of tokenized securities and is pursuing regulatory approval for it.

Nasdaq is preparing to launch tokenized stock services in early 2027 in cooperation with cryptocurrency exchange Kraken, and large financial institutions such as BlackRock and JPMorgan are also successively launching tokenized funds.

The U.S. Securities and Exchange Commission (SEC) has also introduced regulatory exemptions for tokenized securities trading, and LSEG (London Stock Exchange Group) and DTCC (Depository Trust & Clearing Corporation) are conducting blockchain-based settlement and distribution pilots.