South Korea's Shinhan Asset Management has signed a memorandum of understanding (MOU) with Plume to develop a proof of concept for a Korean won-denominated tokenized fund, with a Shinhan won-denominated ultra-short-term bond fund serving as the pilot's underlying asset.

Plume is a blockchain network built for tokenization, with a focus on bringing real-world assets (RWA) onchain. Shinhan said on Friday that the pilot project will use BlackRock's BUIDL tokenized fund as a benchmark to test the issuance and distribution process. BUIDL is a tokenized money-market fund for institutional investors that BlackRock, the world's largest asset manager, launched in 2024.

The two companies will also test compliance requirements for tokenized investment products, including whitelist-based transfer restrictions, onchain operations, Know-Your-Customer (KYC) checks and Anti-Money Laundering (AML) controls. That focus is significant because tokenized funds still need to work within existing financial rules if they are to move beyond pilots and into broader use, especially when they involve cross-border distribution and regulated investment products.

According to Shinhan, the pilot is intended to test the overseas use of won-denominated financial products in onchain markets, which have largely developed around dollar-denominated assets. If successful, the experiment would add a won-based reference point to a market where most tokenized funds and cash-like onchain products have been built around USD-linked structures, making the test relevant for issuers evaluating how local-currency assets could be issued and distributed abroad.

Tokenized funds represent traditional fund shares as blockchain-based tokens, allowing issuance, transfers and record-keeping to be carried out onchain. Ultra-short-term bond funds hold debt instruments with very short maturities.

Shinhan Asset Management is the asset-management arm of Shinhan Financial Group, one of South Korea's largest financial groups, which has pursued a series of digital-asset initiatives. In April, group affiliate Shinhan Card signed an MOU with the Solana Foundation to test stablecoin payment technology and explore the use of non-custodial wallets. Another group affiliate, Shinhan Bank, completed a stablecoin remittance pilot in July 2023. The new MOU extends that sequence of experiments into tokenized fund infrastructure, showing how the group is continuing to test blockchain use cases across payments, remittances and investment products.

Source: Cointelegraph