South Korea Unveils Tokenized Securities Rules, Enabling Blockchain-Based Capital Markets
South Korea's Financial Services Commission has unveiled detailed rules for tokenized securities, paving the way for traditional stocks, bonds, and funds to move onto blockchain-based infrastructure. The new framework takes effect on February 4, 2027, marking a significant step towards blockchain-based capital markets infrastructure.
The rules cover a broad range of asset types, including traditional categories, stocks, bonds, and funds, as well as fractional investment products. To protect investors, distributed ledgers recording these assets must be shared across at least two separate account management entities, plus Korea Securities Depository, the country's central electronic registration authority.
Firms wanting to act as issuer account management entities face real capital and staffing requirements, including a minimum equity capital of ₩4 billion and at least one dedicated account management professional.
The framework also establishes a new OTC exchange licensing category specifically for debt securities, reflecting regulator expectations that retail trading in tokenized debt securities could grow significantly.
The rollout follows a three-phase structure, with Phase 1 focusing on privately pooled money market funds and bonds for institutional investors, unlisted stocks via trust structure, and publicly offered fractional investment securities. Phase 2 and Phase 3 will expand to all publicly offered securities types and establish on-chain payments infrastructure linked to stablecoins, respectively.