South Korea Unveils Ambitious Plan to Tokenize Capital Market on Avalanche

South Korea is set to revolutionize its capital market by moving it on-chain, using the Avalanche blockchain platform. The country's Financial Services Commission (FSC) and Korea Securities Depository (KSD) have outlined a phased tokenization roadmap that will begin in February 2027.

The first stage of the plan involves tokenizing private MMFs for institutional investors, private placement corporate bonds, non-public shares via a trust model, and publicly offered fractional investment securities. In parallel, pilot projects will be conducted to tokenize exchange-traded stocks with the participation of the Korea Exchange.

Avalanche has been chosen as the infrastructure provider for this ambitious project, which is considered one of the largest government tokenization initiatives globally. The FSC's Vice Chairman Kwon Dae-young emphasized that the goal is to create a unified digital capital market where traditional securities can be issued, traded, and settled on-chain.

Companies already holding relevant licenses will be able to work with tokenized securities under their existing authorizations. However, retail investors will face limits on their annual net purchase volume of tokenized securities on a single OTC venue, capped at 100 million won (approximately $74,000). The FSC also plans to set requirements for companies managing the accounts of tokenized security holders, including minimum own capital and specialist personnel.