South Korea’s top financial regulators have introduced a three-stage regulatory roadmap that will see tokenized forms of traditional securities gain full legal status beginning February 4, 2027. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) jointly released the operational plan on September 4, 2026, outlining how stocks, bonds, and funds issued as on-chain tokens will be included under revised capital markets laws.
Phased rollout of tokenized securities
The implementation will proceed in three phases. Phase one, launching February 2027, brings legal clarity and operational rules to tokenized money market funds and bonds targeted toward institutional investors, unlisted stocks administered through trust structures, and publicly offered fractional investment securities. This rollout is possible due to amendments to the Act on Electronic Registration of Stocks and Bonds and the Capital Markets Act, passed earlier in 2026, that officially permit distributed ledgers to record securities ownership.
In phase two, the scope broadens to allow all types of publicly offered securities to be tokenized, pending positive outcomes from the initial phase. The third stage envisions a fully integrated on-chain payment infrastructure, connecting the tokenized securities market to digital settlement in won-denominated stablecoins. The timing of phases two and three remains flexible and will depend on the outcomes of phase one, the speed of industry adoption, and progress toward enacting a separate stablecoin law, which lawmakers have not yet passed.
Mini dictionary: Financial Services Commission (FSC) and Financial Supervisory Service (FSS) – The FSC is South Korea’s main financial policymaker, while the FSS is responsible for supervision, inspection, and enforcement in the financial sector.
Beginning in February 2027, tokenized money market funds and bonds for institutions, unlisted stocks via trust structures, and publicly offered fractional investment securities will receive legal recognition, with broader implementation to follow.
Investor protection and operational requirements
The roadmap details specific protections for retail investors. For non-monetary trust beneficiary certificates, model guidelines propose a maximum subscription limit equal to the lower of KRW30 million or five percent of the issuance per individual. Retail net purchases per over-the-counter exchange are capped at KRW100 million annually. These limits are designed to prevent excessive retail exposure in the early stages of token rollout.
Existing licensed financial institutions are permitted to manage tokenized securities within their present regulatory permissions, subject to prior consultation with the FSS for brokerage or intermediation. Entities seeking to issue and administer their own tokenized securities accounts must have at least KRW4 billion in equity and meet staffing, technology, and cybersecurity standards.
| Requirement | Detail |
|---|---|
| Retail subscription limit | KRW30 million or 5% of issuance (whichever is lower) |
| Annual retail OTC net purchase cap | KRW100 million per exchange |
| Minimum equity for issuer account manager | KRW4 billion |
The FSC intends to propose additional rule changes by September 2026. Infrastructure preparations involving the Korea Securities Depository and relevant securities firms will begin in advance of phase one, with requirements for the testing and ongoing operation of distributed ledger systems also established.
Context and international significance
Legal recognition for tokenized securities in South Korea extends beyond experimental projects to cover established asset classes such as conventional stocks, bonds, and funds. The phased approach reflects regulatory caution, with subsequent stages contingent on legislative developments and technical readiness. South Korea joins a global trend towards digitizing capital markets with government oversight while emphasizing investor protection and systemic stability.
Comparisons with developments in other jurisdictions, such as the United States, highlight that while distributed ledger technology can streamline record-keeping, fundamental changes to securities law and investor rights require substantial legal adaptations.
Stablecoin legislation remains a hurdle
A major component of the roadmap’s later phases involves integrating tokenized securities with on-chain payment systems, ultimately linking transactions to won-based stablecoins. However, the National Assembly has yet to finalize a regulatory framework for these stablecoins. The Bank of Korea, the country’s central bank, has emphasized caution regarding digital won-pegged stablecoins, warning that unchecked trading could put pressure on the local currency. As a result, the envisioned on-chain settlement infrastructure will only be fully realized once lawmakers resolve the stablecoin issue.
Mini dictionary: Korea Securities Depository (KSD) – The KSD is South Korea’s central securities depository, responsible for settlement and custody of securities transactions.
Financial professionals see this roadmap as a sign that tokenization in Asia now involves concrete regulatory timetables, moving past proof-of-concept pilots. South Korea’s approach, which combines capital requirements and a depository-based architecture, offers a framework that integrates digital innovation with established securities infrastructure without eliminating traditional financial gatekeepers.
