Only one place in a year…Will STO Sandbox be designated again
Financial Services Commission begins regular applications for financial regulatory sandboxes
There’s only one STO-related sandbox this year
“Need to prepare an environment to experiment and challenge STO”
This article has been translated into English through AI.
As the financial authorities begin to apply for innovative financial services, attention is being paid to whether the STO (issue token securities) industry will be able to find a new sandbox designation case.
In the past two years, the only place in the STO industry that has been designated as a financial regulatory sandbox (innovative financial service) is the “air consortium” involving Galactica Moneytree. Some say that it should be designated as a sandbox for the STO project, but it is difficult to enter the business because there are not many cases of approval.
According to the financial investment industry on the 19th, the Financial Services Commission said it will receive regular applications for designation of innovative financial services for the first time this year from the 18th to the 28th. The Financial Services Commission plans to decide whether to designate innovative financial services after reviewing the applications submitted during the application period within the legal review period (up to 120 days).
The STO industry is paying attention to whether new STO products can be designated as innovative financial services. Since the announcement of the Token Securities Guidelines by the Financial Services Commission in 2023, there has been only one case of sandbox designation by STO operators.
At a regular meeting in April, the Financial Services Commission designated the “Blockchain-based aircraft engine trust beneficiary securities transaction distribution service” (Air Finance STO) as a new innovative financial service. As there have been no cases of sandbox designation in the STO industry in the past two years, the designation of the sandbox by the aviation finance STO has attracted the attention of the industry.
The Aviation Finance STO is a business model that receives issuance fees by issuing an average of 10 billion won in aircraft engines as trust beneficiary certificates. Last year, △Gallaxia Money Tree △ Shinhan Investment & Securities △ Eugene Investment & Securities △ VMIC △ Cirium formed an “air consortium” to issue aviation finance-based trust beneficiary certificates and created the service.
Industry analysts say that the company received good reviews for its well-structured business model. Galaxy Money Tree must establish a special purpose company (SPC), purchase aircraft engines, and leave the actual engine to Eugene Investment & Securities, a trust company. The trust company must sign an engine trust contract with SPC, the consignor, and issue trust beneficiary certificates through electronic registration.
It is also positively evaluated that the subject of “aircraft parts piece investment,” which has not been seen in the market, is a fresh service that has not been seen in the market. It is said that not only the financial authorities but also the Ministry of Land, Infrastructure and Transport showed a positive response.
An STO industry official said, “The business value must have been recognized not only at home but also abroad because the demand for aircraft engines is clear,” adding, “It seems that the investment, transaction, and distribution structure has been positively evaluated by establishing it in accordance with the guidelines and demands of financial authorities.”
However, some worry that it will not be easy for start-ups that have entered the token securities business to be designated as innovative financial services. It is not easy to create a well-organized structure like an aircraft STO, and it is not easy to introduce a business model that fully meets the needs of the authorities.
Another STO industry official said, “It is expected that various companies will apply for sandboxes to enter the STO business, but if there is no funding or manpower, it may be difficult to prepare for sandbox applications.”