The STO era begins... Fragmentation investment OTC exchanges, KRX vs. NextTrade, a two-way competition

Source: TokenPost Original Title: The Era of STO Opens… Fragmentation Investment OTC Exchanges, KRX and NextTrade Face Off in a 2-Way Battle Original Link: The Korea Exchange and the NextTrade consortium have been selected as the operators of the fragmentation investment over-the-counter trading platform, making the integration of the STO market into the formal financial system more tangible.

Token Securities(STO) market trading infrastructure is being established with the selection of two consortia led respectively by the Korea Exchange and NextTrade as the operators of the fragmentation investment OTC trading platform. Financial authorities are approaching the final stages of preliminary approval, signaling the beginning of the market’s formal entry into the regulatory framework.

The Securities and Futures Commission under the Financial Services Commission deliberated on January 7th and, after reviewing the ‘Preliminary Application for Financial Investment Business of Fragmentation Investment OTC Exchanges,’ decided to select the consortium(KDX), formed by the Korea Exchange and Koscom, and the consortium(NXT), formed by NextTrade and Musicow, as the business operators.

Fragmentation investment involves dividing high-value assets such as artworks, real estate, and music copyrights into smaller units to allow multiple investors to participate. The assets are securitized into token securities(STO), Security Token Offerings. While fragmentation investment has been operated intermittently outside the formal system, financial authorities are designing a legitimate market to protect investors and ensure transaction safety.

The two selected consortia will be able to operate the fragmentation investment OTC exchanges after completing the final approval process from the Financial Services Commission later this year. The FSC plans to approve only up to two companies, and once the final decision is made on January 14th, full-scale operations can commence. This selection marks the first case of allowing STO distribution within the regulatory framework and is closely related to the future expansion of the digital asset market.

Market expectations are high that the participation of traditional financial institutions like the Korea Exchange will enhance the credibility of the STO market. Meanwhile, private-sector-led NextTrade is expected to pursue differentiated strategies focusing on specialized assets such as music copyrights. Notably, Musicow already has significant experience and data in the music fragmentation investment platform, providing a solid foundation for accelerating real-asset digitization projects.

This trend is likely to serve as a catalyst for the stable growth of the blockchain-based digital asset distribution market within the regulatory framework, as institutional measures for fragmentation investment are systematically established. Strengthening investor protection, increasing asset liquidity, and fostering new industries could lead to long-term changes in the financial market structure driven by the STO market.