South Korea’s Financial Services Commission outlined a new roadmap for the digitization of its capital markets, saying on Sept. 4 that it will build tokenized securities infrastructure in three phases starting in February 2027. The plan would expand tokenized issuance from today’s fractional investment products into traditional financial instruments including stocks, bonds and funds.
The announcement came at the third public-private joint consultative meeting on token securities. Under the schedule presented by the FSC, the rollout follows amendments to the Electronic Securities Act and the Capital Markets Act that were passed by the National Assembly on Jan. 15, 2026. The revised framework is set to take effect on Feb. 4, 2027.
The legal changes formally recognize the use of blockchain-based distributed ledgers to record securities issuance and circulation data, and give those ledgers legal effect. Regulators also stressed that tokenized securities are not a separate asset class. They are treated as another issuance format alongside paper securities and electronic securities, which means existing rules on registration, disclosure and intermediary licensing still apply.
Phase one starts with private funds, private bonds and unlisted shares
In the first phase, tokenization will begin with privately placed money market funds for institutional investors, or private MMFs. On the bond side, the initial scope covers privately placed bonds for institutional investors. For equities, the starting point will be unlisted shares using a trust structure.
Under that setup, existing electronic securities would be held by the Korea Securities Depository or a trust company, and tokenized securities representing beneficial interests in the trust would then be issued. Publicly offered fractional investment securities would also be allowed to issue in tokenized form during the first stage.
Phase two would move into publicly offered securities
The second phase would depend on the first stage’s system stability, efficiency and market demand, with infrastructure then extended to publicly offered securities. The South Korean government also plans to refer to related experiments by the New York Stock Exchange and Nasdaq, while the Korea Exchange would lead model validation and pilot programs for tokenized listed shares.
Phase three targets onchain delivery and payment
The third phase aims to connect tokenized securities ledgers with payment ledgers such as stablecoins, allowing securities delivery and cash settlement to be completed simultaneously on blockchain rails.
The FSC said clearly that the timing of the second and third phases will depend on the results of the first phase, the pace of technical development among market participants, interoperability between different distributed ledgers, and progress in South Korea’s stablecoin legislation. For that reason, those later phases should not be viewed as having firm launch dates at this point.
Trading rules and investor limits
On trading oversight, financial institutions that already hold licenses for securities dealing or brokerage would be able to handle tokenized securities within the scope of their existing licenses, without applying for a separate dedicated license.
Over-the-counter trading platforms, however, would still need to consult with the Financial Supervisory Service in advance if they want to support tokenized securities. For retail investors, the annual net purchase cap on each OTC platform will be set at KRW 100 million.
Issuers may directly manage investor securities accounts
South Korea also plans to allow non-financial corporate issuers to apply to become issuer account management institutions, letting them directly manage investor securities accounts tied to their own products.
Applicants must have at least KRW 4 billion in equity capital and must employ personnel specializing in account management, internal controls and information technology. Rules covering issuance scope, OTC trading licenses, investment caps and registration requirements are expected to be included in draft implementing regulations by the end of September 2026 for public comment.
A phased opening, not full tokenization
The policy points to a shift in South Korea’s tokenization agenda, from small-scale, non-standardized fractional investment products toward core capital market infrastructure. Even so, the current plan remains a phased opening rather than full tokenization across the market.
Whether the country can move from pilot programs to broad commercial deployment will hinge on stablecoin legislation, system security, ledger interoperability and market liquidity, according to the roadmap described in the source report.