South Korea Sets Three-Stage Tokenized Securities Plan for 2027

Swan.my.id - Jakarta - South Korea has announced a three-stage plan to bring stocks, bonds and funds onto tokenized infrastructure, with the final phase linking securities settlement to stablecoin-based onchain payments.

The roadmap will begin when amendments to the Electronic Registration Act take effect on February 4, 2027. The changes will expand tokenization beyond fractional investment products and create a legal route for conventional securities to be issued and managed through distributed ledgers.

The Financial Services Commission unveiled the policy at the third meeting of a public-private consultative group. The meeting included the Financial Supervisory Service, financial institutions, industry groups and private-sector experts.

South Korea’s tokenized securities plan starts in February 2027

The first phase will cover a selected group of securities and institutional products. Eligible instruments will include privately pooled money market funds, bonds reserved for institutional investors, unlisted stocks issued through trust structures and publicly offered fractional investment securities.

Authorities will use this initial stage to establish the legal and operational foundation for broader tokenization. The approach will allow regulators and financial companies to assess how distributed ledgers support issuance, trading, settlement and investor protection.

FSC Vice Chairman Kwon Dae-young said authorities would seek to create the foundation for issuing and circulating more traditional securities, including stocks, bonds and funds. He described the longer-term objective as an upgrade to capital market infrastructure for digital connectivity.

The roadmap builds on amendments passed by South Korea’s National Assembly in January. Those amendments recognize distributed ledgers as securities registries while keeping tokenized instruments within the country’s existing securities laws.

Technical preparations are also underway. Samsung SDS won a contract earlier this year to develop a token securities platform for the Korea Securities Depository. Completion is expected around the time the amended laws take effect.

Second phase will expand tokenization to public securities

The second phase would open tokenization to all publicly offered securities. However, regulators have not set a start date for this stage.

Implementation will depend on the results of the first phase and the speed at which financial companies adopt the required technology. This staged approach gives authorities room to review the early system before expanding its scope.

The planned infrastructure is expected to connect the Korea Securities Depository’s existing electronic securities account system with blockchain records. Its functions will include issuance, circulation checks, rights management and monitoring.

The Korea Securities Depository has also prepared screening criteria for distributed ledgers used by securities firms. The tests will cover core issuance and circulation functions, as well as contingency procedures for system failures and other disruptions.

Existing licensed financial investment companies will not need separate authorization solely because they handle tokenized securities. Firms with licenses for the relevant financial activities can operate within their existing permitted business areas.

However, intermediaries handling tokenized securities on over-the-counter markets will need prior consultation with the Financial Supervisory Service. Authorities also plan to introduce another over-the-counter licensing category for debt securities alongside existing categories for unlisted stocks and non-monetary trust beneficiary certificates.

Stablecoins would form the final settlement layer

The third phase would introduce onchain payment infrastructure linked to stablecoins. This stage would bring the cash side of securities transactions onto digital rails.

Its timing will depend on pending stablecoin legislation and the results of the earlier tokenization stages. South Korean lawmakers are working separately on a Digital Asset Framework Act expected to address stablecoin issuance and other parts of the digital asset market.

Stablecoin rules remain one of the unresolved parts of South Korea’s digital asset regulatory program. In August, the FSC said it would accelerate consultations on the legislation as lawmakers sought to complete the framework during the fall session.

Tokenized settlement is already being tested outside the planned securities framework. A separate South Korean program has expanded deposit-token trials to nine banks. Meanwhile, the Bank of Korea has studied tokenized bank deposits as settlement money for tokenized bonds and shares.

Private financial institutions are conducting their own trials ahead of the 2027 legal rollout. Shinhan Asset Management recently signed an agreement to test a Korean won-denominated tokenized fund using Solana.

The proof of concept covers investor verification, issuance, distribution and onchain liquidity. These tests reflect the wider effort to prepare financial institutions for securities infrastructure based on distributed ledger technology.

Retail investment limits will apply

The FSC’s roadmap includes investment limits and operating requirements for tokenized securities. The rules are intended to place boundaries around retail participation as more securities move 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 also want publicly offered allocations to include a portion reserved for retail investors. A minimum amount would be distributed equally among those investors.

Retail investors using over-the-counter exchanges would face an annual net purchase ceiling of 100 million won, or roughly $74,000, on each over-the-counter platform.

Issuers could also manage securities accounts themselves through a new “issuer account management entity” structure. Approved companies would not need to rely exclusively on financial institutions for account management.

Applicants would need at least 4 billion won, close to $3 million, in equity capital. They would also need personnel responsible for account management and internal controls, along with two employees assigned to computer and information technology systems.

Issuers would have to meet specified cybersecurity and technology standards. These requirements are intended to support the reliability of account management and the wider tokenized securities system.

Asian markets are testing blockchain settlement

South Korea’s plan is developing alongside blockchain settlement projects in other Asian markets. 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 in the Japanese project. An initial development plan is targeted for early 2027, with possible operations during the 2030s.

Japanese institutions have already begun testing parts of the model. Four Mitsubishi UFJ Financial Group companies launched a proof of concept in August to test Japanese government bond repurchase agreement settlement on Canton Network.

The test examines automated processing and 24-hour settlement. Tokenized deposits or stablecoins are being considered for the payment side of those transactions.

South Korea also has a sizable domestic digital asset market. FSC data cited in the source material shows 11.3 million verified crypto users in the country.

An OECD report cited in the source material said Asia accounted for 30% of global stablecoin trading activity in 2025. The region also recorded the highest regional growth rate in crypto activity.

Next steps before the first phase

The FSC plans to publish proposed revisions to subordinate regulations under the Financial Investment Services and Capital Markets Act and the 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. Their preparations will determine how the legal framework operates in practice.

The three-stage roadmap therefore connects regulatory reform, market infrastructure and digital settlement. South Korea will begin with selected products, expand to publicly offered securities and eventually consider stablecoin-linked payments for securities transactions.