Everyday Investment in Bills
Ahead of the government's legislation on security tokens (hereinafter referred to as STO), the related industries are experiencing an acceleration in their movement.
According to a media report in Busan, it has been revealed that Aiitone (CEO Jin Yeop Lee), a company listed on KOSDAQ is joining a consortium to launch a trading platform for electronic bill token securities hosted by BNK Busan Bank and NH Investment & Securities.
This consortium aims to enable ordinary people to invest in bills with a small amount through the 'Electronic Bill STO Trading Platform.' In particular, the plan is to convert bills, which are short-term financial instruments, into tokenized securities to make them compatible with the Web 3.0 era.
According to the report, each company will be in charge of platform operation and asset distribution (Busan Bank), account management and issuance of trust securities (NH Investment & Securities), and blockchain platform technology provision and service operation (Aiitone).
Unlike other STO consortiums, which focus on high-priced real assets such as real estate and art, this consortium is unique in that it promotes bills that circulate annually at a scale of about 72 trillion won.
The promotion of STO for electronic bills is the banking industry's first attempt. It is worth noting that the application for innovative financial services (financial regulatory sandbox) was submitted to the Financial Services Commission in the first half of last year.
The domestic electronic billing market is worth approximately 72 trillion won annually (as of 2020). However, only about 24 trillion won is discounted at a rate of 4-5% per year in the first financial sector. The remaining bonds are traded at a discount of up to 20% in the secondary and tertiary financial sectors, as well as in the private bond market. This further complicates the distribution of funds.
The industry expects that with the launch of the electronic bill STO platform, the discount rate (which is actually the same as the interest rate) can be reduced from the current 20% to a more favorable level of around 10% through the issuance of tokens on the bill. This will be beneficial for small and medium-sized enterprises as well as small business owners.
The consortium is eagerly anticipating being chosen as an innovative financial service by the Financial Services Commission. This designation would exempt businesses with a focus on creativity and technology from regulation for a specific period of time. This is because most STO-related projects are promoted as special projects until the legal framework is fully established.
An official stated, "We believe that the majority of issues in the bill market can be resolved through the tokenization of electronic bills,” and showed anticipation by saying "the electronic bill STO platform will have a beneficial effect on the financial market."
In addition, he said, "Once the platform is established, electronic bills, which were difficult for ordinary people to invest in, will be reorganized into a new market that can be easily invested through tokenization (fragmented investment)." Furthermore, he added, "We anticipate the creation of new financial products that offer significantly higher interest rates compared to those offered by banks."
Meanwhile, Aiitone is currently leading the domestic STO business based on its proprietary blockchain technology. Recently, Chairman Bruce Jeong, who oversees global operations including the Middle East, has also been exploring opportunities in the overseas STO market.