Shinhan Asset Management has joined the Solana Foundation, Etherfuse, and decentralized exchange Orca in a proof-of-concept to issue and distribute a Korean won-denominated tokenized fund, placing one of South Korea’s largest asset managers among financial groups preparing products for the country’s incoming security-token framework.
The four parties signed a memorandum of understanding to develop and test the fund structure, issuance process, distribution model, compliance controls, and onchain liquidity arrangements, according to Shinhan Asset Management’s announcement. Shinhan reported 133.6 trillion won, or about $96.6 billion, in assets under management as of August 2026.
Under the proposed model, overseas institutional traders would purchase an ultra-short-term Korean won bond fund managed by Shinhan. Interests in that fund would then be represented as blockchain tokens. The exact legal and operational structure remains under review, but the companies said they are using BlackRock’s BUIDL tokenized money-market fund as a reference point.
A test case for tokenized Korean fund distribution
The project is focused on a familiar financial product rather than a new form of crypto-native yield. Ultra-short-term bond funds generally hold short-dated debt instruments and cash-like assets, making them a possible fit for tokenization because their underlying portfolios are designed for liquidity and relatively stable valuations.
Putting fund interests on a blockchain could allow participating institutions to transfer and settle ownership through a digital ledger, subject to the compliance controls and transfer restrictions built into the product. The proof-of-concept will test how those processes work for a Korean won-denominated fund aimed at overseas institutional participants.
The MOU divides the work across the participating organizations. Shinhan Asset Management would bring the underlying fund-management role, while the Solana Foundation, Etherfuse, and Orca would contribute to the blockchain, tokenization, and liquidity components of the pilot. Etherfuse has focused on tokenized real-world assets, while Orca operates liquidity infrastructure on Solana.
The group said it will examine know-your-customer and anti-money-laundering procedures consistent with South Korean and international requirements. Security audits, blockchain operations, regulatory compliance, and onchain liquidity design are also part of the planned testing.
Those elements will determine whether the model can move beyond a technical demonstration. Tokenized funds require more than a digital representation of portfolio holdings: managers must establish who can hold and transfer tokens, how subscriptions and redemptions are processed, how investor records are maintained, and how the token’s onchain status corresponds with the legal claim on the underlying fund.
South Korea’s STO rules are approaching implementation
The initiative arrives after South Korea moved to establish a legal framework for security token offerings, or STOs. The National Assembly passed amendments in January that set standards for tokenized securities, and the changes were promulgated in February. They are scheduled to take effect in February 2027.
That timetable gives Korean financial firms a limited window to test infrastructure and product structures before the new regime becomes operational. Several major domestic financial groups began preparing tokenized securities services after the legislation passed, reflecting expectations that regulated token issuance could become a new distribution channel for funds, bonds, and other financial assets.
Shinhan’s project is more narrowly defined than a general tokenization strategy. Its stated target is a won-based short-term bond fund offered in tokenized form to overseas institutions. That focus places cross-border distribution, currency denomination, transfer controls, and local securities rules at the center of the test.
The project also differs from South Korea’s separate public-sector experiments with blockchain-based money. In April, the Ministry of Finance and Economy launched a pilot involving blockchain-based deposit tokens for expenses related to official duties. That program concerns payment and settlement for government-related spending, while the Shinhan arrangement concerns the issuance and distribution of an investment-fund product.
BUIDL offers a model, not a direct template
BlackRock’s BUIDL fund has become a common reference for asset managers considering tokenized cash-management products. The fund holds short-term US government debt and related cash instruments, with tokenized ownership distributed through Securitize’s infrastructure.
BlackRock, which manages roughly $11.5 trillion in assets, had about $2.7 billion in BUIDL as of mid-2026, according to figures referenced in the Shinhan announcement. The fund’s expansion has provided a visible example of how conventional money-market assets can be packaged into an onchain instrument for eligible holders.
Shinhan’s proposed product would differ in several practical ways. It would be denominated in Korean won rather than US dollars, use a Korean short-term bond fund as its underlying vehicle, and operate within South Korea’s forthcoming STO rules. Any eventual launch would also need to address how overseas institutions access the fund and how redemptions, custody, and compliance obligations work across jurisdictions.
The tokenized real-world asset market has expanded rapidly, though it remains small relative to conventional fund markets. RWA.io, a blockchain-data platform cited in the announcement, estimated that tokenized real-world assets excluding stablecoins had reached about $36.27 billion, up 2,200% from 2020. Treasury products and money-market strategies account for much of the sector’s visible growth, as higher interest rates have made onchain versions of short-duration debt more attractive.
For Shinhan, the pilot creates a route to test whether a Korean won fund can use public-blockchain infrastructure without bypassing the controls expected of a regulated asset manager. The result will depend less on the token itself than on whether the partners can build a workable system for eligibility checks, custody, settlement, liquidity, and regulatory reporting before South Korea’s new STO regime takes effect in February 2027.
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