Digitalization of Real Estate and Assets Inevitable – Urgency for STO Commercialization Preparation

Heejong Park, CEO of Open Meta City

Since financial authorities have allowed 'Security Token Offering (STO),' the calculations within the virtual asset industry, including virtual asset operators and securities firms, have become increasingly busy. There is a prediction that the STO market will gain momentum from this year onwards. Furthermore, there is advice to pay attention to the unfamiliar concept of 'Real World Asset Tokenization (RWA)' even in South Korea.

On January 16, 2024, at a IT trend forum held in Yeouido, Seoul, under the theme 'Big Data Collective Intelligence (Forum Leader Kim Young-sil),' Heejong Park, CEO of Open Meta City, gave a lecture on 'Domestic and International STO·RWA Cases and Convergent Virtual NFT Real Estate Platforms.'

According to CEO Park, STO is a method of bringing virtual assets into the realm of traditional securities, issuing tokens similar to stocks, and raising capital. The tokens issued are subject to regulations such as the Capital Market Act applicable to securities.

He predicted that the digitalization of assets, including real estate, is inevitable in the future. Already, there is an increase in participation in various businesses such as fractional investments, securities firms, and asset owners through tokenization, moving in the direction of a new industry.

Park mentioned, "STO has garnered attention in the market for several years. However, there hasn't been a significant issue to feel its presence, so the enthusiasm had somewhat subsided." He added, "But it appears that commercialization will take place by the end of this year or next year. Therefore, players should start moving and participating this year, leading to a revival in the market."

In the domestic real world asset sector, there has been a lot of movement towards the tokenization of various assets such as beef, music, luxury goods, real estate, and whiskey. Music Cows, in particular, has gained attention. Overseas, as of September last year, RWA players mainly targeted typical assets such as U.S. treasures and bonds (26.96%), precious metals (44.62%), corporate credit certificates (18.47%), and real estate (7.17%).

Using domestic examples like Casa, Soyou, and Funble, as well as overseas STO cases like Red Swan, Franklin Templeton, Centrifuge, and RealT, Park emphasized, "Recently, Bitcoin received approval for a spot-listed index fund (ETF) in the United States. This signifies the connection of virtual assets to traditional finance." He further stated, "The global finance industry looks up to the United States as a reference. It's time for South Korea to prepare for change."

On this day, the forum was attended by various leading member in the industry, including Kim Young-sil from Data & AI Weekly, Park Sang-gi, PhD from Korea Securities Depository (KSD), Bae Young-woo, CEO of Medirita, Lee Sang-ok, Managing Director of Data Streams, Roh Seok-jong, Vice President of ZigiZi, Kim Ki-hoon, CEO of Hi-Tech Information, Jin Tae-jong, IT Inspection Division Director of the Financial Supervisory Service, Lee Sang-woon, CIO Manager of the Korea Financial Telecommunications & Clearings Institute, Won Chang-seon, CIO Manager of Shin Young Securities, Choo Jeong-ho, CEO of Future Nurie, Kim Ju-yeon, CEO of Packaging Land, Kang Myeong-joo, Vice President of Nectarsoft, Lee Kang-min, Director of CAS, and Ahn Seok-hwan, Head of BNK Investment & Securities.