South Korea’s Financial Services Commission (FSC) has introduced a proposal to permit the trading of tokenized stocks, bonds, and funds in the country starting February 4, 2027. The move follows a new regulatory roadmap announced on October 1 and marks a significant expansion in the tokenization of financial assets within South Korea’s capital markets.
Expanded tokenization to cover securities
The FSC has scheduled a consultation period for subordinate rules between October 2 and November 11, 2026, under the revised Financial Investment Services and Capital Markets Act and the Electronic Registration Act. When these laws take effect in February 2027, tokenization will extend beyond current restrictions, which so far only cover fractional investment products on blockchain networks.
Under the new framework, the scope of tokenized assets will include traditional securities such as stocks, bonds, and investment funds. The FSC also plans to include non-monetary trust beneficiary certificates and investment contract securities within this regulatory expansion, aiming to modernize Korea’s securities infrastructure and investor experience.
The FSC confirmed this phased approach during its September 4 announcement, outlining a multi-stage timeline for implementation. These efforts are designed to offer flexibility while gradually bringing more financial instruments onto blockchain-based settlement systems.
| Stage | Scope |
|---|---|
| 1 | Privately placed money market funds and bonds for institutions, unlisted stocks (via trusts), and public fractional securities |
| 2 | Publicly offered securities |
| 3 | On-chain settlement layer connected to stablecoins |
New rules for tokenized asset issuers
The draft proposal details eligibility requirements for institutions aiming to issue tokenized securities. Entities will need to share access to distributed ledgers with the Korea Securities Depository and at least two designated account management organizations. Issuers may not charge direct fees for ledger use, as stipulated by the regulator.
For the first time, organizations outside of traditional financial firms can become “issuer account management entities,” enabling them to oversee customer accounts as issuers of tokenized securities. To qualify, candidates must maintain at least 4 billion won in equity capital and employ a minimum team that includes an account management specialist, an internal-control specialist, and two IT professionals.
The proposal also introduces an over-the-counter (OTC) licensing regime for debt securities, expanding the existing system for unlisted stocks and non-monetary trust certificates. Investor protections will limit annual net purchases by retail investors on each OTC exchange to 100 million won.
Mini dictionary: Financial Services Commission (FSC), South Korea’s main financial regulatory authority, oversees banking, capital markets, insurance, and regulates digital asset activities in the country.
Crypto income tax regime faces political pushback
While the tokenized securities regime advances, lawmakers from both the ruling and opposition parties are seeking to delay implementation of the country’s planned crypto income tax system. The existing regime, set for January 1, treats profits from transferring or lending digital assets as miscellaneous income and imposes a 20% tax on annual gains above a 2.5 million won threshold. Including a 2% local surcharge, the total effective tax rate rises to 22%, with taxes on 2027 gains due in May 2028.
Prominent legislators, such as Rep. Min Byung-duk from the Democratic Party and Rep. Kim Jae-seop of the People Power Party, have introduced separate proposals to postpone the crypto tax launch as far as 2030. Rep. Song Eon-seog and Rep. Jung Sung-kook have also called for further delays or the removal of tax provisions, while Rep. Kim Sang-hoon has suggested a 2029 implementation date.
Lawmakers stated the proposed tax delay is supported by a broad coalition across both major political parties, reflecting industry and public concerns about the readiness of the digital asset market.
Industry, investors, and government stand divided
Industry bodies, notably the Digital Asset eXchange Alliance, informed lawmakers that exchanges remain unprepared for compliance, lacking a standardized data-sharing infrastructure with regulators. The group has called for additional time to develop and test this system.
A survey conducted by Tiger Research and Chainalysis found that 73.7% of 2,423 Korean investors oppose the immediate introduction of the crypto tax. In addition, a petition seeking another postponement recently collected over 50,000 signatures, sending it to the National Assembly’s Strategy and Finance Committee for consideration.
Finance Minister Lee Hyoung-il supported the January tax start, citing that 85% of Korean investors hold crypto worth less than 5 million won and would face little or no tax burden after the basic deduction.
Originally, the crypto tax had been set to take effect in 2022, but it has already been delayed three times, most recently to 2027. The current proposals would mark a fourth postponement if approved.
