When people hear the word "token," they are likely to think of Bitcoin first. However, starting next year, the term "token" may also be applied to stocks, bonds, and funds such as Samsung Electronics shares. Does this mean an era is coming where stocks will be bought and sold like coins?
To answer directly, it is "half right and half wrong." Once the tokenized securities system is fully implemented in February next year, stocks, bonds, and funds will be able to be issued and managed using blockchain technology. However, this does not mean that Samsung Electronics shares will suddenly turn into Bitcoin.
The easiest way to understand tokenized securities is to think of it as "the content remains the same, but the packaging method changes." Currently, when you buy a stock, instead of receiving a paper certificate, your account records how many shares you hold electronically. Tokenized securities are a method of recording this information in a ledger that utilizes blockchain.
It is similar to the difference between a printed book and an e-book. The same novel can be printed on paper or created as a digital file. The content being read remains exactly the same.
Stocks are no different. Just because a stock is issued as a token does not make it a virtual asset. A stock remains a stock, and a bond remains a bond. They continue to be subject to capital market regulations applicable to investors.
Until now, when people mentioned tokenized securities, "fractional investment," where multiple people invest small amounts in art or real estate, came to mind first. Going forward, the scope will expand significantly. A path has opened for familiar financial products such as stocks, bonds, and funds to be created in token form.
That said, it does not mean that when you open a securities firm's app in February next year, "Token Samsung Electronics" will suddenly appear next to Samsung Electronics. What is possible under the system and what actual products are released are different issues. Changes are likely to emerge gradually, depending on what products companies and financial institutions create and how trading markets are established.
A token is merely a method of recording and managing securities. Separate market rules determine the specific hours during which trading can take place. In other words, "tokenized securities" does not equal "24-hour trading."
However, the markets available to investors may become more diverse. Financial authorities are revising regulations to allow for the creation of new over-the-counter trading markets where bonds and other instruments can be traded, alongside the tokenized securities system.
In simple terms, this means that new options will be added one by one to the investment products and trading methods previously seen in securities firm apps. Of course, not just any product can be created and traded freely. Investment limits and issuance and distribution regulations for the protection of general investors will also apply.
If tokenized securities become established, there is a high possibility that assets currently difficult to invest in will be converted into small-unit securities. Conversely, familiar stocks and bonds may be issued or traded in ways different from before.
Things that were previously "difficult to turn into securities" will become easier to create as investment products, while methods for issuing and distributing products that are already securities will become more diverse.
However, it is unlikely that the investment landscape will change completely overnight in February next year. It will only be possible to know what actual products emerge and how much retail investors utilize them once the market is established.
Nevertheless, there is no longer a need to think of tokenized securities merely as "fractional investment" where one buys a few thousand won worth of art. Starting next year, stocks, bonds, and funds can all wear the "token" outfit.
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