Kakaopay Securities teams up with Ondo and Dinari to tokenize Korean stocks

"Global demand for investment opportunities in Korean companies continues to grow rapidly, yet access channels for overseas retail investors remain limited," Chung Inyoung, executive vice president of Kakaopay Securities, said as the brokerage signed a memorandum of understanding (MOU) with Ondo Finance, which describes itself as the world's largest tokenized equity platform. The two companies signed the agreement on Sept. 28 and will jointly study ways to distribute Korean-listed stocks overseas in the form of blockchain tokens. On Sept. 29, Kakaopay Securities also announced a partnership with Dinari, a U.S. company that tokenizes stocks.

In stock tokenization, the actual shares are held by a custodian such as a brokerage, and tokens linked one-to-one to those shares are issued and traded on a blockchain. Overseas investors can gain exposure to Korean stocks without opening a separate Korean brokerage account.

Foreign investor omnibus account as the starting point

According to Ondo Finance's official blog, the two companies agreed on three areas of cooperation.

• Building a framework for the international distribution of Korean listed equities
• Joint research on tokenization infrastructure to support global distribution
• A joint task force (TF) to explore business opportunities for overseas retail investors

At the center of the structure is a foreign investor omnibus account operated by Kakaopay Securities. The account pools orders from multiple overseas investors to buy, hold and administer Korean shares. The companies will jointly research the issuance and redemption of tokens backed by those shares, as well as reconciliation mechanisms that match the number of tokens to the number of underlying shares. The joint task force will be set up later this year. Whether to commercialize will be decided after reviewing legal and regulatory requirements and investor protection principles.

Ondo Finance said on its official blog on Sept. 22 that its tokenized stock product, Ondo Stocks, had surpassed $1 billion in total value locked and $26 billion in cumulative trading volume. The product offers tokenized U.S. stocks and ETFs on Solana, Ethereum and BNB Chain. "South Korea is one of the most sophisticated digital asset markets in the world, and a critical market for Ondo," said Matthieu de Vergnes, managing director and global head of institutional at Ondo Finance.

With Dinari, one token for one real share

The Dinari partnership goes a step further. According to a press release Dinari issued on Sept. 29, the two companies will jointly build a framework for sourcing the underlying Korean-listed shares and conduct a proof of concept (PoC) for tokenizing them. They will explore applying Dinari's dShares model to Korean stocks, a structure in which each token is backed one-to-one by an actual share and designed to preserve shareholder rights such as dividends and voting where applicable. That means the tokens would use actual shares listed in Korea as the underlying asset, rather than being derivative tokens that only track share prices.

The joint task force, to be formed later this year, will examine token issuance and redemption, reconciliation between tokens and the underlying shares, the treatment of shareholder rights, and the infrastructure needed for overseas distribution. Dinari, an SEC-registered transfer agent, currently offers 724 tokenized U.S. stocks and ETFs to investors in the United States and more than 85 jurisdictions. "Korea is home to some of the world's most important public companies, yet access to Korean equities remains limited for many investors outside the country," said Dinari CEO Gabe Otte.

Korea's token securities rules take effect next year

Kakaopay Securities, launched in February 2020, obtained an investment trading business license in July this year. In Korea, amendments to the Electronic Securities Act, which allow distributed ledgers to be used as securities account registers, and to the Financial Investment Services and Capital Markets Act, which allow investment contract securities to be distributed through brokerages, passed a plenary session of the National Assembly on Jan. 15. The Financial Services Commission said at the time that the revised laws would take effect around January 2027, one year after promulgation. No Korean companies or launch dates have yet been set for tokenization under the partnerships.

ONDO at 685 won on Upbit

ONDO, the token of the Ondo Finance ecosystem, is listed on the Korean won markets of Korean exchanges Upbit and Bithumb. As of 7:33 a.m. KST on Sept. 30, ONDO traded at 685 won on Upbit, down 3.25% from 24 hours earlier, and at 686 won on Bithumb. At the same time, it was priced at $0.5044 on Binance, or about 685 won, leaving virtually no kimchi premium (the gap between prices on Korean exchanges and global markets). On Binance's daily chart (UTC), ONDO rose as high as $0.6089 on Sept. 28, the day the MOU was signed, before closing at $0.5199.