White House Crypto Council Drives Market Change

The speaker themes at this year's Korea Blockchain Week (KBW) have rapidly evolved over the past three years. In 2022, tech-centric founders focusing on mainnets, new technology development, and ecosystem expansion predominated. However, in 2023, policy and regulatory officials became key speakers, bringing the institutionalization of the blockchain industry and regulatory discussions to the forefront. By 2024, financial institutions and related service providers took center stage, fostering active discussions on how blockchain technology can be integrated into actual financial services and commercially utilized.

Global companies' approach to the Korean market has significantly changed. In the past, there was a strong emphasis on listing coins on Korean exchanges to raise capital, viewing the Korean market merely as an Eldorado for funding. Currently, the strategy has shifted to dominating the market by leveraging Korea's excellent retail customer base. Global companies have begun to recognize Korea as an important testbed for new services and business models.

Notably, global custody companies like BitGo participated extensively. The private institutional event organized by Upbit was not open to the public but exclusively for invited institutions. This demonstrates that the Korean market is recognized as a crucial early adopter market in the global blockchain and digital asset landscape. It has evolved from a public mass event to a platform for in-depth discussions among specific institutional participants.

Traditional stocks include various rights structures such as voting rights and dividend rights, making it difficult to fully implement all of them digitally when tokenized. Furthermore, multiple stakeholders like issuers, brokerage firms, liquidity providers, and custodians are involved, requiring considerable time to reach consensus and integrate systems. Due to this complexity, the commercialization of tokenized stocks is slower than other digital assets.

24-hour trading is not properly implemented, and the T+2 settlement system issue remains unresolved. There are also many restrictions on actually exercising voting or dividend rights digitally. These functional limitations reveal that tokenized stocks are not providing substantial benefits.

Companies awaiting listing, such as SpaceX, Anthropic, and OpenAI, can use stock tokenization to offer investors trading opportunities for capital gains even before their IPO. This significantly enhances accessibility to investments in unlisted companies and provides liquidity.

This is considered a significant change that will greatly improve the liquidity of tokenized stocks and offer new trading opportunities to global investors. It is an attempt to leverage the advantages of digital assets by moving beyond the trading hour limitations of traditional stock markets.

The functional advantages of tokenized stocks over traditional stock investments must be clearly demonstrated to gain investor trust. Especially new financial services, such as collateralized lending and interest-earning structures linked to DeFi, need to be implemented. Currently, there is a lack of players offering meaningful advantages, limiting market expansion. Investors need to experience both the value as an actual asset and various utilization possibilities through tokenized stocks.

Without a KRW stablecoin, stock tokenization could face problems of unbacked scalability. The establishment of a clear regulatory framework, similar to the Clarity Act being discussed in the U.S., must precede in Korea. This would help clarify legal interpretations and accountability for digital assets. For building Korea's unique digital asset ecosystem, the introduction of stable, KRW-based digital assets is urgent.

This will strengthen the negotiating power of domestic companies and enhance service scalability. If KRW-based digital assets are stably supplied, global players are likely to enter the Korean market more actively and create new business opportunities through partnerships with domestic companies.

Interesting foreign government bonds, US stocks, and various credit funds could be offered to Korean investors in tokenized form. However, this would prevent Korean assets from entering overseas markets, hindering a virtuous cycle in the domestic ecosystem. If the Korean market does not strengthen its own fundamentals, there is a risk of exacerbating the imbalance where only a unilateral inflow of foreign assets is permitted.

How these events will act as turning points for the market and what insights they will provide are key interests for industry stakeholders. In particular, the actual outcome of industry M&A and financial company collaborations is expected to be clarified through these events. The roadmap and strategy announcements from major blockchain companies will also be important indicators for gauging the market's direction.

The higher the importance of the Korean market, the more specific messages companies deliver to attract Korean users. This demonstrates that they highly value the Korean market's growth potential and investment prospects.