STO Era Begins: Tokenizing Securities Is Just the Start; Payment Infrastructure Is Essential
By Kwon,sung jin Posted : November 1, 2026, 18:04 Updated : November 1, 2026, 18:04
The implementation of the Security Token Offering (STO) system is set to begin next year, but significant challenges remain before the market can fully activate. It is essential to establish not only a system for issuing securities on the blockchain but also a robust infrastructure for processing transactions.
According to the European Securities and Markets Authority (ESMA), the EU launched a ‘DLT Pilot Regime’ in March 2023 to test trading and settlement of securities based on distributed ledger technology (DLT). However, the market has not seen the expected activation since the introduction of the regime. As of May last year, only three platforms were available for buying and selling securities and processing the transfer of securities and funds.
A major reason for the sluggish market activation in the EU is the lack of adequate payment infrastructure. While ESMA has opened the market for trading, it has noted that the necessary systems for the convenient exchange of securities and funds are not sufficiently established.
In contrast, Switzerland is cited as a successful example of effectively connecting securities and payment methods in a real operational environment. The Swiss SIX Group’s Digital Exchange (SDX) is an approved digital securities trading and settlement platform that supports trading and settlement of blockchain-based securities. This initiative is significant as it goes beyond merely issuing tokenized securities to establishing a foundation for actual trading and settlement in the financial market.
The United States is also rapidly expanding its tokenized securities market by leveraging existing securities market infrastructure. The Depository Trust & Clearing Corporation (DTCC), which serves as the U.S. securities depository and settlement infrastructure, is working on services to tokenize stocks, exchange-traded funds (ETFs), and government bonds. In December of last year, the U.S. Securities and Exchange Commission (SEC) granted a no-action letter allowing tokenization services for three years, with plans for a full service launch in October of this year.
Oh Moon-sung, a visiting professor at Kyung Hee University’s Graduate School of Business, stated, “Building a payment infrastructure is crucial for activating the STO market. If the infrastructure fails to develop, the transition from paper securities to digital will be limited, making it impossible to shorten the T+2 settlement cycle.”
* This article has been translated by AI.
Kwon,sung jin
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