South Korea Unveils Rules for Blockchain-Based Tokenized Securities

South Korea has made significant strides in integrating blockchain technology into its traditional capital markets. The country's Financial Services Commission (FSC) recently unveiled detailed rules that will enable stocks, bonds, and funds to be tokenized on blockchain-based infrastructure.

The new framework, which takes effect on February 4, 2027, covers a wide range of asset types, including traditional categories like stocks, bonds, and funds. It also allows for fractional investment products structured as non-monetary trust beneficiary certificates or investment contract securities.

Investor protections are built into the framework, with retail investor protection sitting at its center. The maximum investment limit for retail investors is capped at an annual net purchase amount of ₩100 million (approximately $70,000) on each individual OTC exchange platform.

The rollout will follow a three-phase structure, with Phase 1 starting in February 2027 and focusing on privately pooled money market funds and bonds for institutional investors. The framework also establishes a new OTC exchange licensing category specifically for debt securities.