Securitize collaborates with LG CNS to advance the tokenization of assets in South Korea
Securitize and LG CNS have signed a memorandum of understanding covering three development directions for digital asset services targeting Korean institutions, including tokenized securities and stablecoin infrastructure.
- The protocol covers market development, tokenization technology, as well as digital asset infrastructure for financial institutions.
- The services to be launched still need to comply with local laws, obtain regulatory approval, and pass the internal compliance processes of both companies.
- LG CNS has launched KITL, which features wallet management, transaction processing, support for transaction fees, and record aggregation functions.
- Laws related to securities tokens in South Korea are expected to come into effect on February 4, 2027.
Securitize announced on October 6th that the two companies will explore institutional products and systems to connect Korean financial institutions with global capital markets. According to the agreement, Securitize will provide its regulated tokenization experience, while LG CNS will offer technical services as well as its network of relationships within the Korean financial industry.
The announcement states that the cooperation between the two parties will cover institutional-level tokenized funds, securities, stablecoins, as well as digital asset financial solutions. Any final products launched will need to undergo regulatory review if required, and must also complete the internal approval and compliance procedures of both parties.
Securitize and LG CNS plan to launch institutional-level tokenization services
The announcement states that through joint business development, both parties plan to seek opportunities in South Korea and other Asia-Pacific markets. The proposed cooperation also includes technical implementation, product development, as well as educational efforts for institutions considering adopting tokenized financial products.
When talking about the Korean market, Securitize, co-founder and CEO Carlos Domingo, mentioned Korea's finance and technology industries, as well as LG CNS's professional capabilities in the local area.
Domingo represents: "Our goal is to help build the necessary infrastructure and bring more high-quality financial products onto the blockchain in South Korea."
The head of the digital business department, Executive Vice President Kim Hongkeun, stated that the combination of local fintech in South Korea with Securitize infrastructure is expected to support "practical applications that comply with regulatory requirements."
Securitize has previously reached a cooperation with another Korean institution. As reported by crypto.news on September 23, KB Securities signed a tripartite tokenization fund agreement with Securitize and Optimism Foundation, with the initial plan to launch a money market fund for institutional clients on OP Mainnet.
According to the announcement released by the brokerage firm, under this arrangement, KB Securities will be responsible for institutional relationships, securities issuance, and distribution; Securitize will provide tokenization infrastructure; Optimism will provide blockchain technology.
In addition to the initial money market funds, KB Securities indicates that there are also plans to launch a tokenized product based on the KB Asset Management strategy. The brokerage firm also noted that stocks, American depository receipts, corporate bonds, and South Korean government bonds may also become subsequent products in the future, depending on local regulations.
In the same announcement, KB Securities stated that they are studying whether it is possible to provide existing tokenized funds from global asset management companies to Korean institutions.
South Korea's token regulations propose capital and trading requirements
Prior to the scheduled implementation date of February 4, 2027, the Financial Services Commission of South Korea ( FSC ) has established operational requirements for securities tokens. On October 1, the commission issued a notice, and the comment period lasted from October 2 to November 11.
A regulatory draft reported on October 2nd indicated that the proposed rules for securities-based tokens cover stocks, bonds, funds, and fragmented investment securities. According to the proposal, approved distributed ledgers will be used to record ownership of securities, while the Korea Securities Depository and Clearing Corporation (KSDC) will still maintain its role within the registration system.
For companies that issue securities-type tokens and directly manage customers' securities accounts, FSC recommends that their shareholders' equity capital should reach at least 4 billion Korean won. The staffing requirements include 1 professional in account management, 1 professional in internal control, and 2 professionals in information technology.
According to this proposal, the distributed ledgers must be shared by at least two account management entities in conjunction with the Korea Securities Depository and Clearing Corporation. Operators will be prohibited from charging users directly for access to these ledgers.
In terms of trading, FSC plans to establish a separate over-the-counter (OTC) exchange licensing category for debt securities. Retail investors are limited to an annual net purchase amount of 100 million Korean won per OTC exchange, calculated as the net amount after subtracting sales from purchases.
Regulators stated that the proposed rules will undergo a series of approval processes after soliciting feedback and will come into effect in February next year.
KITL provides wallet and transaction record functions for financial institutions
While announcing the collaboration, LG CNS launched KITL on October 6th, which includes Keystone, of, and Institutional Trust Landscape. The company stated that this platform is aimed at banks, securities companies, card issuers, and payment service providers that are developing stablecoins, tokenized securities, and real-world asset services.
LG CNS lists four core functions: digital wallet, transaction processing, support for network fees, and collection of transaction records. The company states that service providers can agree on how to share the network fees according to their arrangements.
In terms of record collection, the company stated that KITL can extract relevant transactions from public blockchains. Stablecoin issuers can use these records to compare the issuance volume with monetary deposits, while distributors can utilize them for settlement, accounting, and auditing purposes.
LG CNS indicates that its wallet technology is built upon the test results of the 'Han River Project' ( Project Hangang ) conducted by the Bank of Korea. This project involved 7 banks and approximately 80,000 customers, including scenarios of real-time payments at convenience stores and supermarkets.
In addition to Securitize, LG CNS also named Circle, Canton Foundation, Chainalysis, and Chainlink as partners. The company stated that the cooperation will cover stablecoin infrastructure, institutional network access, transaction monitoring, and blockchain connectivity.
The listing of Securitize in the United States connects this transaction with investors in the public market.
For American investors, the SECZ stock of Securitize listed on the New York Stock Exchange has provided an existing channel to hold equity in this tokenized company. In a announcement on October 6th, the company stated that as of September, its asset management scale was approximately $5 billion, and it listed BlackRock, Apollo, BNY, Hamilton Lane, KKR, and VanEck as its asset management partners.
On July 2nd, after completing the merger with Cantor Equity Partners II and beginning to trade on the New York Stock Exchange, Securitize tokenized its own shares on Solana and Avalanche.
The company stated that these tokens represent the same common stocks as those listed on the exchange. Qualified American investors can access them through their regulated platforms, and the laws, contracts, and transfer restrictions applicable to the underlying stocks also apply to these tokens.
South Korea's investment in Securitize also preceded this collaboration with LG CNS. A report on July 21 regarding U.S. regulatory disclosure documents showed that Hanwha Group held a 9.6% stake in Securitize, totaling 15.69 million shares, which were distributed among its affiliated companies and investment vehicles.
According to these disclosures, a private equity fund managed by Hanwha Asset Management holds 5.9%, H Foundation holds 3.1%, and Hanwha Investment Securities holds approximately 0.6%. A spokesperson for a securities firm told local media that each related party independently evaluated and implemented their own investments.
