South Korea’s principal financial authority stated on Friday that it will develop a tokenization framework capable of supporting every variety of security, encompassing equities, bonds, and investment funds.
This declaration came on the heels of the third gathering of a consultative panel dedicated to tokenized securities held that very day. South Korea has enacted amendments that legally recognize blockchain-based securities, scheduled to become active on February 4, 2027.
The Financial Services Commission mentioned that the administration has formulated a phased, three-part strategy to build out the network.
3-step plan
The initial phase centers on the implementation of the security token legislation this coming February. South Korea will initiate the tokenization process for private money-market funds and private corporate debt specifically for institutional participants.
The tokenization of stocks will kick off with unlisted shares being converted via a trust structure, wherein the equities remain within the traditional infrastructure while buyers obtain a tokenized trust-beneficiary security.
Should this preliminary phase demonstrate stability and success, phase two will broaden the framework to include publicly issued securities. The third phase will implement an onchain settlement mechanism enabling market participants to clear tokenized assets utilizing stablecoins.
The FSC pointed to BlackRock’s BUIDL tokenized fund alongside Hong Kong’s tokenized green bonds as primary benchmarks.
No additional license needed
As per the recent announcement, traditional securities brokerages and trading houses will be permitted to manage tokenized assets without obtaining any extra permits.
Nevertheless, over-the-counter marketplaces are required to coordinate with the Financial Supervisory Service beforehand, and individual retail participants trading on such platforms face a yearly net-purchase restriction of 100 million won ($74,000) per exchange.
Furthermore, the FSC established registration criteria for non-bank issuers wishing to maintain investor accounts for their proprietary tokenized assets. These entities will be required to hold 4 billion won ($3 million) in equity capital alongside dedicated account management, compliance, and technology personnel.
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Originally published at https://www.theblock.co/news/regulation/2026-09-04-south-korea-to-start-tokenizing-all-types-of-securities-in-three-stages-from-2027-413523.
