South Korea's new exchange Nextrade plans to launch K-Pop tokens to challenge traditional giants by tokenizing cultural assets.

In early November 2025, South Korea’s alternative trading system Nextrade is considering launching digital tokens linked to K-Pop song copyrights as part of its strategy to break Korea’s 70-year monopoly of traditional exchanges. CEO Kim Hak-soo stated that the platform will differentiate itself through over-the-counter products, leveraged inverse ETFs, and dark pool derivatives.

Since its launch in March 2025, Nextrade’s average daily trading volume surged from 75 trillion KRW (approximately $520 million) in September to 133 trillion KRW (about $920 million) in October. However, due to legal restrictions capping trading volume at 15%, the platform was forced to suspend trading of certain stocks. This innovative move marks Korea’s capital market expanding from traditional securities toward the tokenization of cultural assets. If regulatory restrictions are eased, it could trigger a new wave of market transformation.

Market Breakthroughs and Differentiation Strategy

According to Bloomberg, Nextrade is a trading platform jointly owned by the Korea Financial Investment Association and local brokerages including Mirae Asset Securities. Its March 2025 launch broke Korea’s 70-year monopoly of the stock exchange by extending trading hours to 12 hours, attracting a large retail investor base. CEO Kim Hak-soo emphasized in an interview, “Compared to simple competition, we need to offer products that Korea’s stock exchange does not have to ensure competitiveness.” This philosophy is reflected in its product roadmap: in the short term, launching K-Pop music copyright security tokens; mid-term, introducing leveraged and inverse ETFs before June 2026; and long-term, developing advanced order systems and dark pool-like non-displayed institutional orders.

This differentiation directly responds to Korean investors’ demand for innovative products—over 14 million retail investors show a strong preference for cultural assets and tech-themed investments. Nextrade’s rapid growth has prompted reactions from Korea Exchange, the main competitor, which is considering extending trading hours and lowering trading fees.

K-Pop Tokenization Model and Intellectual Property Innovation

Nextrade, together with music copyright trading platform Musicow, is applying for preliminary approval of a fractional investment platform aimed at issuing security tokens representing K-Pop song copyrights. This tokenization model allows investors to purchase shares of top idol group songs (e.g., BTS or Blackpink) with a minimum of 10,000 KRW (about $7) and earn royalties from streaming and licensing.

Unlike traditional real estate-backed tokens, K-Pop tokens are based on intellectual property assets, with their value linked to song traffic, commercial licensing, and concert revenues. Data from Musicow shows that top K-Pop songs can yield annual returns of 8-12%, significantly higher than Korea’s 10-year government bonds at 3.2%. Kim Hak-soo noted, “Intellectual property of Korean cultural content could open new opportunities for product development in this field.” Considering the global K-Pop market is projected to reach $20 billion by 2025 and the Korean government has prioritized cultural technology as a national strategy, such tokens could attract international investors’ attention.

Nextrade Market Performance and Regulatory Constraints

Launch Date: March 2025

Average Daily Trading Volume: 75 trillion KRW in September, 133 trillion KRW in October

Trading Volume Cap: 15% as per legal regulation (relative to Korea Exchange)

Number of Stocks Traded: 630 (down from an initial 800)

Comparison Data: Singapore Exchange’s September trading volume was $1.2 billion

Shareholder Structure: 34 shareholders, including Korea Financial Investment Association and Mirae Asset Securities

Product Roadmap: K-Pop tokens, leveraged/inverse ETFs, dark pool derivatives

Regulatory Barriers and Market Competition Dynamics

Nextrade’s expansion faces significant regulatory constraints, notably the “Financial Investment Services and Capital Markets Act,” which limits the total trading volume of alternative trading systems to 15% of Korea Exchange’s volume. To comply, Nextrade has artificially reduced liquidity, suspending trading of 170 stocks, including Kakao Corp.

CEO Kim Hak-soo, a former Financial Services Commission official involved in drafting legislation for alternative trading systems, is lobbying to lift this restriction. He believes, “Regulators understand the issue, discussions are ongoing, and changes are expected.” Meanwhile, Korea Exchange has begun countermeasures, considering extending trading hours and lowering fees from 0.002% to 0.0015%. While these moves benefit investors, Nextrade’s initial advantages—longer trading hours and lower fees—may erode over time, compelling continuous innovation to maintain attractiveness.

Development Outlook and IPO Expectations

As Kim Hak-soo begins his second 2.5-year CEO term this week, speculation about Nextrade’s initial public offering (IPO) is increasing. The 34 shareholders hope for a quick listing, but Kim stated that “discussing any blueprint is premature,” with current focus on expanding the product portfolio.

Valuation-wise, if based on Singapore Exchange’s 1.5x price-to-sales ratio, Nextrade’s October annualized trading volume of 3.39 quadrillion KRW (about $2.3 trillion) could support a valuation of $4.5–5 billion. However, a listing may depend on regulatory easing—if the 15% cap is lifted, Nextrade could resume full stock trading, potentially reaching 20-25% of Korea Exchange’s volume (which currently averages around 90 trillion KRW daily).

A broader opportunity lies in cross-border connectivity: Nextrade is exploring interconnection with Hong Kong and Singapore exchanges, which could enable products like K-Pop tokens to enter global markets. Risks include low liquidity of cultural asset tokens and potential price volatility driven by celebrity events.

Conclusion

Nextrade’s challenge to Korea’s traditional exchange monopoly through innovative products like K-Pop tokens reflects a trend of expanding capital markets from standardized securities to personalized cultural assets. Despite regulatory constraints limiting short-term growth, its soaring trading volume and product differentiation demonstrate strong market demand for new investment tools. If regulatory conditions improve, Nextrade could become a leading example of Korean fintech globalization, pushing intellectual property tokenization into a new asset class frontier.