PARAMETA (formerly ICONLOOP) is helping build Korea's first security token platform backed by real estate NPLs.
PARAMETA has signed a business agreement with plutospartners, an operator of NPL security token platforms, to jointly build Korea's first real estate NPL security token platform.
Under the agreement, PARAMETA and plutospartners will jointly apply for the financial regulatory sandbox in order to build a security token platform using real estate NPLs as the underlying assets. Once the service is designated an Innovative Financial Service, the two companies plan to carry out the full scope of work around security token offerings (STO) and distribution together.
NPL (Non-Performing Loan)
A loan the lending institution has little or no prospect of recovering — credit that has stopped "performing." Once repayment is more than three months overdue, financial institutions typically classify the loan as substandard or below and sell it off; institutions and asset-backed securitization firms treat these NPLs as investment products offering both safety and yield, buying them and realizing recovery gains. With corporate distress and household debt on the rise, the NPL market has been steadily growing.
In this partnership PARAMETA acts as plutospartners' blockchain technology partner, supplying all of the technology needed to build the security token platform on top of its own service, PARAMETA S, and will continue to provide technical support and cooperation for stable platform operation down the road.
PARAMETA S _ STO as a Service
PARAMETA S packages the full range of security token technology. It makes fractional management of real-world assets possible using tokens, supporting real asset investment management such as STOs and fractional ownership administration.
Drawing on its expertise and know-how in real estate NPLs, plutospartners plans to work actively with PARAMETA to explore the opportunities this fractional investment platform can open up in a field individuals have long found hard to access.
Because security token issuers will increasingly take on the shape of financial companies, sophistication within the framework of proven fund systems is expected to be necessary, and PARAMETA's technology — already proven in real fund operations — is considered essential for a security token issuer. Combining PARAMETA's strength in digitizing and automating the manual work of advanced fund front and back offices, custodian banks, prime brokerage services (PBS) and fund administrators through API systems with the know-how of plutospartners CEO Sangki Jung, an expert in asset management operations, the two companies will develop and deliver a stable platform service built on blockchain fintech that ties financial consumer protection to the financial system.
Following the Financial Services Commission's release of its STO guidelines (a plan to overhaul the rules governing security token issuance and distribution) this past February, the shape of the related amendment bills has started to emerge, and fractional investment platforms built on security tokens are expected to take off in earnest. Various STO products and platforms are already appearing around real estate, but NPL investing — the asset behind the platform the two companies are preparing — has long been classified as an area individual investors could barely approach because of its high barriers to entry.
* Related article: Institutionalization of STOs picks up speed… distributed ledger technology gains legal recognition <Financial News / reporter Han Young-jun / 2023.07.13>
That is why PARAMETA and plutospartners are building this platform: to open the door for ordinary investors to real estate NPL investing, which offers both safety and high return potential along with a thick "margin of safety" layer on its yields, among other advantages. Through Korea's first real estate NPL security token platform, the two companies expect to share returns with platform participants, grow together with them and bring investment in the field to a mass audience.
Using security tokens innovates the asymmetry of an NPL market individuals have found hard to enter. It gives individuals a chance to invest in NPLs, and at a time when growing household debt and corporate distress point to more non-performing loans, it gives administrative agencies a market-friendly, natural alternative to injecting public funds. It will become an investment sector that satisfies both the public and private sides.
Sangki Jung, CEO of plutospartners
With the draft legislation recently made public on the heels of the STO guidelines, the prospect of STOs entering the regulated system is gradually coming into view. Building on the blockchain and Web3 technology and the wide-ranging operational experience it has accumulated, PARAMETA intends to lead the way in shaping a security token ecosystem that offers individuals a broad set of investment opportunities — so stay tuned. :)
About PARAMETA (formerly ICONLOOP)
PARAMETA is a technology company that has led innovation under the slogan "Web3 Enabler," continuously developing blockchain and Web3 technology and applying it across industries. Backed by a full-stack technology set that spans all of Web3 and a track record of successful public and enterprise blockchains, PARAMETA has established itself as a strong partner for the technology and consulting behind Web3 adoption and transformation.
PARAMETA offers PARAMETA Service (PARAMETA W, N, S, T), which lets businesses pick and apply the core elements of Web3 — Wallet, NFT, STO and Token Management — without building their own infrastructure, supporting a fast and easy Web3 transformation.
About plutospartners
plutospartners is the operator of Korea's first NPL-focused security token investment platform, currently in development with a target launch in the second half of this year. For all its advantages, NPL investing has been the exclusive preserve of institutions and professional investors because of high barriers to entry and the expertise it demands. Some investors drawn to it have tried private-placement routes through auction academies and the like, but difficulties in account management and moral hazard on the part of operators have kept ordinary investors from participating in any real numbers.
plutospartners aims to innovate this asymmetric NPL investment market with blockchain-based STOs, bringing NPL investing to a mass audience in a way that is safe and easy for anyone to join.
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Web3 Enabler, PARAMETA