South Korea Set to Tokenize Stocks, Bonds, and Funds Under New Regulatory Framework

South Korea is moving closer to integrating tokenized securities into its regulated financial markets. The Financial Services Commission (FSC) has proposed new rules for securities issued and traded using distributed ledger technology, which are expected to take effect on February 4, 2027.

The proposed framework would allow traditional securities, including stocks, bonds, and funds, to be issued and circulated in tokenized form. This would unlock billions in capital and enable securities to trade on distributed ledgers by February 2027.

Entities issuing tokenized securities while also directly managing customers' securities accounts would need at least 4 billion won (~$2.9 million at current prices) in equity capital and at least four designated professionals covering account management, internal controls, and information technology.

Retail investors would be subject to an annual net purchase limit of 100 million won on each OTC exchange as part of the proposed investor-protection measures.