UK to apply distributed ledger across finance…What about Korea?
UK to operate digital securities sandbox for five years
Trading of stocks, bonds, etc. using distributed ledger technology
Domestic Market Focuses Only on Unstructured Securities Trading
“Korea should also consider the effect of introducing distributed ledger technology.”
This article has been translated into English through AI.
The UK, which announced the introduction of digital securities sandboxes (DSS) in January, is about to apply distributed ledger technology in the financial market. It plans to use distributed ledger technology like virtual assets when issuing and trading securities. It is different from Korea, which provides special cases only to services that are recognized as differentiated from existing financial services. The securities industry advises that Korea, like the UK, should pay attention to the fact that token securities can replace the existing financial system.
According to the securities industry on the 10th, the UK plans to operate the DSS system over the next five years. It will allow securities such as stocks and bonds, excluding virtual assets such as Bitcoin, to be issued and settled using distributed ledger technology. The UK plans to look at bills that need to be revised later through the DSS system and support them to be applied to the financial infrastructure system as a pilot.
Earlier in January, the UK Ministry of Finance presented the DSS system as a major policy and implemented it in earnest. The UK has formed the framework of the DSS system for about a year, granting regulatory management authority to the Bank of England (BoE) and the UK Financial Supervisory Service (FCA) and preparing detailed guidelines. Since then, in April, a consultation plan between the BoE and the UK FCA, which contains details such as bank regulations, fee systems, and guidelines for applicants, was released, and the process of collecting opinions from related industries was carried out until May 29.
Meanwhile, Korea is operating a regulatory sandbox system (innovative financial service) by the Financial Services Commission. Industry analysts say that there is a difference between the UK’s DSS system and domestic innovative financial services in the purpose of introduction. Analysts say that the domestic market places more weight on the fact that investors can access new investment assets, rather than expecting the effects of the introduction of a distributed ledger when institutionalizing token securities.
“The DSS system is designed to introduce distributed ledger technology to the financial market,” said Shim Soo-bin, a researcher at Kiwoom Securities. “On the other hand, innovative financial services are not designed to introduce distributed ledger technology as they aim to suspend the application of existing regulations and test-run innovative technologies and services in the financial environment such as fintech.”
In fact, attention is focused on whether atypical securities such as non-monetary trust beneficiary securities and investment contract securities are issued and distributed in Korea. However, interest in the domestic token securities market is decreasing as it is difficult to designate innovative financial services and it is not easy to write securities reports in the case of investment contract securities. Some point out that they cannot find a reason to proceed with what can be done through the existing securities system under the new system.
Kiwoom Securities points out that the effects of the introduction of distributed ledger technology are not considered much in the market as it focuses on providing new investment destinations in Korea. Researcher Shim said, “It is time for domestic financial authorities to think about cases that can show efficiency and transparency that can be obtained by replacing existing electronic securities with token securities,” adding, “We need to continue to look at the selection of companies participating in DSS in the UK and evaluation reports in the future.”