South Korea has taken a major step toward formalizing blockchain-based capital markets, as lawmakers advanced legislation that creates a clear legal framework for issuing and trading tokenized securities.
Key Takeaways
South Korea has approved rules for issuing and trading tokenized securities.
Blockchain-based securities will be regulated and traded through licensed intermediaries.
The new rules are expected to take effect in January 2027.
The move opens the door for regulated security token offerings (STOs), integrating blockchain technology into the country’s traditional financial system.
On Thursday, the National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act, recognizing tokenized securities as legitimate financial instruments and outlining how they can be issued, distributed, and traded under Korean law.
Under the new framework, eligible issuers can create tokenized securities on blockchain networks. Meanwhile, amendments to the Capital Markets Act allow these products to be traded through brokerages and other licensed intermediaries, combining the efficiencies of blockchain with established investor protections.
Officials described tokenized securities as a broad category, covering both debt and equity products, rather than a niche market. The reforms are also expected to make it easier to manage securities accounts and expand the use of smart contracts in market infrastructure.
Authorities see particular potential in tokenizing non-standard investment contracts—such as securities tied to real estate, art, or agricultural projects—bringing these previously limited products under a regulated STO framework and widening investor access.
After legislative approval, the bills will move to the state council and then to the president for formal enactment, a process expected to be straightforward. A one-year preparation period will precede the rules going live in January 2027.
Implementation will be overseen by the Financial Services Commission (FSC), working alongside the Financial Supervisory Service, Korea Securities Depository, and industry participants. A consultation body is expected to meet as early as next month to develop supporting infrastructure, including blockchain-based account systems and additional safeguards.
A Growing Market Opportunity
Industry forecasts suggest tokenized securities could be a massive market. Standard Chartered has projected that tokenized real-world assets could reach a $2 trillion market globally by 2028, while the Boston Consulting Group estimates South Korea’s tokenized securities market alone could hit nearly 367 trillion won ($249 billion) by the end of the decade.
Local financial groups, including Mirae Asset Securities and Hana Financial Group, are already preparing platforms ahead of the new rules.
The push into tokenized securities comes as South Korea also ramps up its crackdown on crypto-related financial crime. The government recently expanded its travel rule requirements, lowering the threshold for identity checks to cover transactions under 1 million won ($680), closing loopholes that previously allowed users to split transfers to avoid detection.
