PARAMETA and plutospartners Cooperate to Build Korea's First Real Estate NPL Security Token Platform
[Photo caption: The signing ceremony for the PARAMETA–plutospartners agreement on a joint financial regulatory sandbox application and partnership for a real estate NPL security token platform]
July 25, 2023, Seoul — Web3 Enabler PARAMETA (formerly ICONLOOP, CEO JH Kim) announced that it has signed a memorandum of understanding with plutospartners (CEO Sangki Jung), operator of an NPL security token platform, to cooperate on building Korea's first real estate NPL security token platform.
Under the agreement, PARAMETA and plutospartners will jointly apply to the financial regulatory sandbox to build a security token platform using real estate NPLs (non-performing loans)* as underlying assets, and plan to carry out the work involved in security token offerings (STOs) and distribution together once designated as an innovative financial service.
*NPL (Non-Performing Loan): debt that a financial institution has lent but is unlikely or unable to recover — in other words, loans that are no longer "performing." When repayment is more than three months in arrears, financial institutions typically classify the debt as substandard or below and sell it; institutions and securitization companies assess such NPLs as investment products offering both safety and returns, purchasing them and realizing recovery income. The NPL market has been growing steadily amid rising corporate distress and household debt.
In this partnership, PARAMETA acts as plutospartners' blockchain technology partner, providing the technology needed to build the security token platform on the basis of its own service PARAMETA S (STO as a Service), while continuing to offer technical support and cooperation for stable platform operation thereafter.
Drawing on its expertise in real estate NPLs, plutospartners plans to work with PARAMETA to actively pursue the range of opportunities such a fractional investment platform can create — applying security token technology to real estate NPL investment, a field individuals have found difficult to access.
Since security token issuers will come to resemble financial institutions, advancing within the framework of already-proven fund systems is expected to be necessary, and PARAMETA's technology, proven in actual fund operations, is regarded as essential for issuers. Combining PARAMETA's strong technology — capable of 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 expertise of plutospartners CEO Sangki Jung, a specialist in asset management operations, the two companies will develop and provide a stable platform service built on blockchain fintech technology linked to financial consumer protection and the financial system.
With the Financial Services Commission publishing its STO guidelines (a framework for regulating security token issuance and distribution) in February and the outlines of related amendments beginning to emerge, fractional investment platforms using security tokens are expected to take off in earnest. While a variety of STO products and platforms are emerging around real estate, NPL investment — the basis of the platform the two companies are preparing — has been classified as an area individual investors could scarcely access, owing to its particularly high barriers to entry.
PARAMETA and plutospartners are therefore preparing this platform to open real estate NPL investment opportunities to ordinary investors — an area combining safety with the potential for high returns, and offering a thick margin of safety on returns, among other advantages. Through Korea's first real estate NPL security token platform, the companies hope to share returns with platform participants, pursue growth together, and bring investment in the field into the mainstream.
"Following the announcement of the STO guidelines, the recent publication of draft legislation is making the prospect of STOs entering the regulated financial system increasingly visible," said PARAMETA CEO JH Kim. "Drawing on the blockchain and Web3 technology and operational experience we have built up, PARAMETA will lead in creating a security token ecosystem that can offer individuals a range of investment opportunities."
"Using security tokens has transformed the asymmetry of an NPL market individuals have found hard to participate in," said plutospartners CEO Sangki Jung. "It will become an investment sector satisfying both the public and private sectors — offering individuals NPL investment opportunities, and offering administrative bodies a more market-friendly, natural solution than injecting public funds at a time when non-performing debt is expected to rise alongside growing household debt and corporate distress."
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About PARAMETA (formerly ICONLOOP)
PARAMETA is a technology company that has consistently developed blockchain and Web3 technology under the slogan "Web3 Enabler," leading innovation by applying it across industry. Backed by a full technology stack applicable across Web3 and by a record of success with numerous public and enterprise blockchains, PARAMETA has established itself as a strong partner supporting the technology and consulting needed for Web3 adoption and transformation. PARAMETA supports fast, straightforward Web3 transformation through PARAMETA Service (PARAMETA W (Wallet), N (NFT), S (STO), T (Token Management)), which lets businesses select and apply the core Web3 elements of wallet, NFT, STO, and token management without building their own infrastructure.
About plutospartners
plutospartners operates Korea's first NPL-focused security token investment platform, currently in development with a target launch in the second half of this year. Despite its many advantages, NPL investment has been the exclusive preserve of institutional and professional investors, owing to high barriers to entry and the expertise required. Some investors drawn to the field have attempted private investment through auction academies and similar routes, but participation by ordinary investors has yet to take hold, given difficulties with account management and the moral hazard of operators. plutospartners aims to transform this asymmetric NPL investment market through blockchain-based STOs, bringing NPL investment into the mainstream in a way that is safe and that anyone can participate in easily and conveniently.
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