South Korea Sets Stage for Entire Stock Market Tokenization by 2027

South Korea's Financial Services Commission (FSC) has unveiled a three-phase roadmap to tokenize its entire stock market, setting a date of February 4, 2027, for the first phase. The plan aims to create an infrastructure applicable to all types of securities, not just fractional investment products.

The first phase will begin when the reformed securities law comes into effect on February 4, 2027, and will focus on tokenizing private placement money market funds, corporate bonds, unlisted stocks issued through a trust structure, and publicly offered fractional investment securities for institutional investors.

In the second phase, the system will be expanded to all publicly offered securities. The third and final stage aims to build a settlement system directly on the blockchain, allowing investors to settle their tokenized transactions using stablecoins.

The FSC has established conditions to protect investors and guide firms in the sector. Existing securities firms will be able to operate with tokenized securities using their current licenses without needing to apply for a new one.

Retail investors on OTC platforms will have an annual net purchase limit of 100 million won (about $74,000) per platform. Non-bank issuers must have 4 billion won (approximately $3 million) in capital and dedicated personnel for account management, regulatory compliance, and the operation of IT systems.