South Korea will begin building infrastructure in 2027 to bring a broad range of securities, including stocks, bonds and funds, into a tokenized framework under a three-stage plan announced by the country’s top financial regulator.
The Financial Services Commission outlined the roadmap on Friday following the third meeting of a consultative body on tokenized securities. Amendments giving blockchain-based securities legal recognition are due to take effect on Feb. 4, 2027.
The rollout will initially focus on instruments for institutional investors. Private money-market funds and privately placed corporate bonds will be among the first securities covered once the new law takes effect in February.
Unlisted equities will follow a different structure during the opening phase. Rather than moving the shares themselves out of the existing system, they will remain there and be placed in a trust, with investors receiving tokenized trust-beneficiary securities.
Public Securities and Onchain Settlement to Follow
A successful and stable first phase would clear the way for the FSC to broaden the infrastructure to publicly offered securities in the second stage.
The final stage is designed to add onchain settlement, allowing tokenized securities to be settled using stablecoins. In developing the three-stage framework, the FSC pointed to BlackRock’s BUIDL tokenized fund and Hong Kong’s tokenized green bonds as key references.
Existing Securities Licenses to Cover Tokenized Assets
The regulatory approach will not require securities brokerages and trading firms to obtain an additional license before handling tokenized securities, provided they already operate under existing securities licenses.
Separate conditions will apply to over-the-counter exchanges. Those venues must first consult the Financial Supervisory Service, while retail investors will be restricted to 100 million won ($74,000) in annual net purchases at each platform.
Non-bank issuers that plan to maintain investor accounts for their own tokenized securities will also face registration requirements. The FSC will require those institutions to hold 4 billion won ($3 million) in equity capital and maintain dedicated personnel responsible for accounts, compliance, and information technology (IT).
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