Key Points
- Hanwha Asset Management established a collaborative agreement with the Jito Foundation to develop infrastructure supporting liquidity staking ETPs within South Korea’s financial markets.
- The collaboration focuses on bringing JitoSOL into regulated investment vehicles through comprehensive technical development and regulatory compliance efforts.
- Leadership at Hanwha highlighted JitoSOL’s compelling yield potential and liquid trading capabilities, suggesting applications in long-term savings vehicles.
- Both organizations will work together to verify custody infrastructure and develop risk management protocols necessary for securing ETP authorization.
Hanwha Asset Management, a leading South Korean investment firm, has entered into a strategic alliance with the Jito Foundation to develop liquidity staking exchange-traded products. The collaboration brings together technical expertise and regulatory knowledge as both entities work toward launching compliant digital asset investment vehicles.
Strategic Alliance with Jito Foundation
Hanwha Asset Management announced the collaborative arrangement as part of its initiative to create investment infrastructure supporting JitoSOL, with plans to establish regulated ETP frameworks within South Korean financial markets. The agreement encompasses both technological integration requirements and regulatory coordination efforts, with emphasis placed on building compliant operational systems.
Senior management pointed to the asset’s combined rewards mechanism, with Choi Young-jin noting that “JitoSOL provides high returns and liquidity,” while suggesting potential applications in retirement investment vehicles. The collaboration will address custody system verification and risk management protocols, providing guidance for financial institutions navigating evolving digital asset regulations.
The initiative prioritizes alignment of yield generation mechanisms with domestic regulatory standards, with both teams conducting testing to determine how reward structures function within regulated investment frameworks. This development work aims to facilitate future regulatory submissions. The organizations will also establish standardized reporting mechanisms designed to assist institutions in evaluating product metrics.
Technical Implementation of JitoSOL
The partnership will establish technical pathways connecting JitoSOL to ETP infrastructure, refining data transmission protocols required for regulatory compliance while coordinating with blockchain development teams on system reliability. The organizations plan to validate operational capabilities required by licensed financial service providers and evaluate ongoing operational requirements for continuous staking reward distribution.
The dual yield mechanism combines staking revenue with MEV (maximal extractable value) rewards, with both firms developing financial models of these returns for product architecture while confirming how yields can be documented according to local regulatory standards. Regulatory consultation will occur throughout the design phase, with teams preparing documentation required for regulated product distribution.
This development aligns with expanding international activity surrounding staking-linked ETPs, with 21Shares recently introducing a comparable offering in European markets and VanEck maintaining a pending application with United States regulators. The partners identified these movements as indicators of growing institutional appetite for regulated staking investment opportunities, positioning their work within this broader international context.
Regulatory Environment and Market Position
Hanwha Asset Management oversees trillions of won in client assets while expanding its digital asset capabilities and developing operational infrastructure for emerging product categories. The firm characterized the partnership as a component of strategic long-term planning, anticipating that regulatory framework maturation will enable product introductions.
South Korea’s Digital Asset Basic Act continues progressing through legislative processes, with policymakers engaged in ongoing discussions regarding licensing frameworks, though disagreements concerning stablecoin issuer requirements have extended implementation timelines. Financial regulators have advocated for bank-exclusive licensing models, while industry associations contend this approach would constrain market development, leaving the matter unresolved.
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