South Korea has laid out a three-stage plan to bring stocks, bonds and funds onto tokenized infrastructure, with the final phase set to connect securities settlement to stablecoin-based onchain payments.
Summary
- South Korea will begin expanding tokenized securities in February 2027, starting with selected funds, bonds, unlisted stocks and fractional investment products.
- The second phase will open tokenization to all publicly offered securities, while the final stage will introduce onchain payment infrastructure linked to stablecoins.
- Existing licensed financial firms will be allowed to handle tokenized securities under their current licenses, while qualifying issuers can manage their own securities accounts.
- Retail subscriptions will be capped at the lower of 30 million won or 5% of an issuance, with annual net purchases on OTC exchanges limited to 100 million won.
The Financial Services Commission said Friday that the roadmap will begin when amendments to the Electronic Registration Act take effect on Feb. 4, 2027, expanding tokenization beyond fractional investment products and creating a legal route for conventional securities to be issued and managed through distributed ledgers.
FSC Vice Chairman Kwon Dae-young unveiled the policy at the third meeting of a public-private consultative group attended by the Financial Supervisory Service, financial institutions, industry groups and private-sector experts.
Authorities plan to build the system in stages, starting with a limited group of securities and institutional products before opening tokenization to publicly offered securities and eventually connecting the market to stablecoin settlement.
“Authorities will seek to lay foundations to facilitate the tokenized issuance and circulation of more traditional types of securities, including stocks, bonds, and funds,” Kwon said, describing a longer-term plan to upgrade capital market infrastructure for digital connectivity.
South Korea tokenization plan starts in February 2027
During the first phase, privately pooled money market funds and bonds reserved for institutional investors will become eligible for tokenization. Unlisted stocks issued through trust structures and publicly offered fractional investment securities will fall within the initial framework as well.
The rollout builds on amendments passed by South Korea’s National Assembly in January that recognize distributed ledgers as securities registries while keeping tokenized instruments within the country’s existing securities laws. Crypto.news previously reported that the tokenized securities rules were scheduled to take effect in February 2027 as regulators worked on standards covering issuance, trading and settlement.
Technical infrastructure is being prepared alongside the legal framework. Samsung SDS won a contract earlier this year to develop a token securities platform for the Korea Securities Depository, with completion expected around the time the amended laws take effect.
The system is expected to connect the KSD’s existing electronic securities account infrastructure with blockchain records, covering issuance, circulation checks, rights management and monitoring.
South Korea’s second phase would open tokenization to all publicly offered securities. Regulators have not fixed a start date because implementation will depend on results from the first stage and the pace at which financial companies adopt the required technology.
Stablecoins form the final settlement layer
The third phase would introduce onchain payment infrastructure linked to stablecoins, bringing the cash side of securities transactions onto digital rails.
Its timing remains dependent on pending stablecoin legislation as well as the results of the earlier tokenization stages. South Korean lawmakers have been working separately on a Digital Asset Framework Act expected to cover stablecoin issuance and other parts of the digital asset market.
In August, the FSC said it would accelerate consultations on the legislation as lawmakers sought to complete the framework during the fall session. Stablecoin rules have remained one of the main unresolved parts of South Korea’s digital asset regulatory program.
Tokenized settlement is already being tested outside the planned securities framework. A separate South Korean program has expanded deposit-token trials to nine banks, while the Bank of Korea has studied the use of tokenized bank deposits as settlement money for tokenized bonds and shares.
Private financial institutions are running their own trials ahead of the 2027 legal rollout. Shinhan Asset Management recently signed an agreement to test a tokenized fund denominated in Korean won using Solana, covering investor verification, issuance, distribution and onchain liquidity in a proof of concept.
Retail limits will apply to tokenized securities
The FSC’s roadmap sets investment limits and operating requirements as regulators prepare to bring more securities onto distributed ledgers.
For non-monetary trust beneficiary certificates, the maximum individual subscription would be the lower of 30 million won, roughly $22,000, or 5% of the total issuance volume. Regulators want publicly offered allocations to include a portion reserved for retail investors, with a minimum amount distributed equally.
Retail investors using over-the-counter exchanges will face an annual net purchase ceiling of 100 million won, or roughly $74,000, on each OTC platform.
Existing financial investment companies will not need a separate authorization solely because they handle tokenized securities. Firms already licensed for the relevant financial activity can operate within their existing permitted business areas, although intermediaries handling tokenized securities on OTC markets will need prior consultation with the Financial Supervisory Service.
Authorities plan to introduce another OTC licensing category for debt securities alongside existing categories covering unlisted stocks and non-monetary trust beneficiary certificates. The FSC expects debt-security transactions to become more common as tokenization develops.
Issuers will have another route through the new “issuer account management entity” structure. Companies approved under the system can manage securities accounts themselves instead of relying exclusively on financial institutions.
Applicants must maintain at least 4 billion won, or close to $3 million, in equity capital. Staffing requirements include personnel responsible for account management and internal controls, along with two employees assigned to computer and IT systems. Issuers must meet specified cybersecurity and technology standards.
The Korea Securities Depository has prepared screening criteria for distributed ledgers used by securities firms. Tests will cover core issuance and circulation functions as well as contingency procedures for system failures and other disruptions.
Asian markets are testing blockchain settlement
South Korea’s plan is developing alongside blockchain settlement projects elsewhere in Asia.
Japan is studying a system that could eventually process publicly traded stocks and Japanese government bonds on blockchain infrastructure around the clock. The Financial Services Agency, Ministry of Finance, Bank of Japan and financial institutions are expected to participate, with an initial development plan targeted for early 2027 and possible operations during the 2030s.
Japanese institutions have already begun testing parts of that model. Four Mitsubishi UFJ Financial Group companies launched a proof of concept in August to test JGB repo settlement on Canton Network, examining automated processing and 24-hour settlement. Tokenized deposits or stablecoins are being considered for the payment side of those transactions.
Asia accounted for 30% of global stablecoin trading activity in 2025 and recorded the highest regional growth rate in crypto activity, according to an OECD report cited in the source material.
South Korea itself had 11.3 million verified crypto users, according to FSC data, giving regulators a sizable domestic digital asset market as the securities framework moves toward implementation.
The FSC plans to publish proposed revisions to subordinate regulations under the Financial Investment Services and Capital Markets Act and Electronic Registration Act by the end of September. Securities companies and the Korea Securities Depository will work on the required infrastructure before the first phase begins in February 2027.
