South Korea’s top financial regulator has announced a three-stage plan to build infrastructure capable of tokenizing “all types” of securities, including stocks, bonds and funds, with the first initiatives due to begin in February 2027.
The Financial Services Commission (FSC) outlined the plans after a meeting of the country’s consultative body on tokenized securities on Friday.
Amendments recognising blockchain-based securities in law have already been passed and are scheduled to come into force on 4 February 2027.
The first stage will begin once the new securities token law takes effect. It will initially focus on private money-market funds and private corporate bonds for institutional investors.
South Korea also plans to begin tokenizing equities during this phase. The process will start with unlisted shares being placed into a trust, while the underlying shares remain on the existing financial system. Investors would then receive a tokenized security representing their beneficial interest in the trust.
The government said the first stage would be assessed for stability and effectiveness before the programme expands.
If the initial system operates successfully, the second stage will extend tokenization to publicly offered securities. The third stage would introduce an on-chain settlement system, allowing investors to settle tokenized securities using stablecoins.
The FSC said it had considered international examples including BlackRock’s BUIDL tokenized fund and Hong Kong’s tokenized green bonds while developing the framework.
Existing firms can handle tokens
Under the proposed arrangements, established securities brokerages and trading firms would be permitted to deal in tokenized securities without having to obtain an additional licence.
Over-the-counter exchanges would face a separate requirement to consult the Financial Supervisory Service before operating in the market.
Retail investors using those platforms would also be subject to an annual net-purchase limit of 100 million won, equivalent to about $74,000, at each venue.
The regulator has additionally set out registration requirements for non-bank issuers seeking to operate investor accounts for their own tokenized securities.
Those institutions would need equity capital of at least 4 billion won, or approximately $3 million. They would also be required to appoint dedicated staff responsible for investor accounts, compliance and information technology.
The measures form part of South Korea’s broader effort to create a regulated market for blockchain-based financial assets. The government’s three-stage approach means that the initial rollout will be limited, with wider public-market participation and stablecoin settlement dependent on the earlier infrastructure proving reliable.
The FSC has not indicated that all forms of securities will become available at the same time. Instead, the timetable prioritises institutional products and unlisted equities before moving towards publicly offered instruments and on-chain settlement.
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