South Korean Finance Firms, Held Back by Home Rules, Take Tokenization Tests Overseas to Avoid Falling Behind

Major South Korean financial companies are stepping up efforts to expand into on-chain finance with Ondo Finance, a global real-world asset tokenization platform. With related rules still delayed at home, they are testing the market overseas first.

Executives from Mirae Asset Global Investments, Meritz Securities and Hanwha Asset Management discussed ways to tokenize Korean financial products and distribute them globally at the “Burning With Ondo” event held Sept. 29 at the Lion Club in Seoul’s Cheongdam district.

Mirae Asset Global Investments is moving fastest, expanding tokenization of financial products through its overseas subsidiary Global X. In June, the firm partnered with Ondo Finance and has been rolling out a tokenization business for its exchange-traded funds. Already, 15 U.S.-listed Global X ETFs are being distributed on-chain through the Ondo Finance platform.

Lee Chang-joo, a manager at Mirae Asset Global Investments, said the tokenization market remains small compared with traditional finance but will continue to grow. The company moved into the business because it did not want to fall behind and instead wanted to lead the market.

He added that clear U.S. regulation made the project possible. Mirae Asset was able to pursue the business because it has a local U.S. entity and a regulatory basis for tokenization there.

Hanwha Asset Management is also preparing to tokenize domestic ETFs, while building business experience in overseas markets first. Kim Yoon-sik, strategy team head in the global fixed-income division at Hanwha Asset Management, said the firm is preparing tokenization for Korean ETFs and is also participating in tokenization of U.S. assets.

Kim also pointed to distribution as the next key issue for the tokenization market. Demand is expanding geographically from regions where traditional finance is less developed to more mature markets. By investor type, it is broadening from younger retail investors to older generations and institutional investors.

South Korea’s Tokenization Industry Hinges on Institutional Participation

Speakers also said South Korea needs to formalize digital-asset rules quickly for the domestic tokenization market to succeed. Institutional participation is essential for the market to scale, and institutions may hesitate to enter a market where regulation remains unclear.

Shim Min-seop, head of global digital assets at Meritz Securities, said the tokenization market is broadening from retail investors to institutions. Institutional investors want products that can generate stable returns through investment on secure platforms.

He added that regulations assign separate roles to asset managers, banks and securities firms. Just as asset managers create products and securities firms handle distribution, the tokenization market also needs infrastructure tailored to each type of financial institution.