Kakaopay Explores Tokenized Korean Equities with Dinari, Ondo

South Korea's Kakaopay Securities is taking initial steps toward bringing local equities onto blockchain networks. The firm announced separate partnerships on Tuesday with tokenization specialists Dinari and Ondo Finance to explore the process.

The agreements focus on sourcing underlying Korean-listed shares, building tokenization infrastructure, and potentially distributing these digital assets to investors outside South Korea. Tokenized assets represent traditional financial instruments on distributed ledgers, allowing for faster settlement and broader accessibility.

Under the collaboration with Dinari, the companies plan to execute a proof of concept utilizing Dinari's dShares framework. This model aims to preserve essential shareholder rights, including voting privileges and dividend payouts. Dinari currently supports numerous tokenized US stocks and exchange-traded funds, and the new project seeks to extend that architecture to Korean equities.

Gabe Otte, CEO of Dinari, noted that specific local companies have not yet been chosen for the initial testing phase. Furthermore, the partners have not established a definitive public timeline for commercial availability. Otte emphasized that the proposed framework would rely on locally listed Korean shares as underlying assets rather than synthetic tokens that merely track price movements.

Meanwhile, Kakaopay's arrangement with Ondo Finance centers on establishing operational procedures for sourcing and custodying the underlying shares. Kakaopay would manage a foreign investor omnibus account to hold and administer these assets securely. Both firms will also research methods for token issuance and redemption, with future commercialization depending heavily on regulatory compliance both domestically and internationally.

Why it matters

The exploration by Kakaopay occurs as South Korea systematically updates its capital markets infrastructure to accommodate digital assets. In January, the country's National Assembly approved legislative amendments that officially recognize distributed ledgers as valid securities registries. Subsequent actions by the Financial Services Commission have linked this digital asset infrastructure to a wider modernization of South Korean financial markets.

Global interest in tokenized real-world assets has grown significantly, with distributed value reaching approximately $3.2 billion by late September, according to data from RWA.xyz. However, this burgeoning market remains heavily dominated by US equities and funds. Expanding the tokenization model to Asian markets could broaden international investor access to foreign equities, provided regional compliance hurdles are successfully navigated.

What to watch

Observers are closely monitoring the implementation of South Korea's new regulatory framework, which is officially scheduled to take effect in February 2027. In parallel, the Korea Securities Depository is developing the necessary technical infrastructure to connect traditional securities account systems with blockchain-based data registries. Future updates on Dinari and Ondo's proof-of-concept trials will likely indicate whether tokenized Korean shares move beyond the exploratory phase.