Summary

• South Korea will launch its three-stage tokenization framework in 2027, initially covering private funds, corporate bonds, and unlisted company shares.
• Later stages will expand blockchain-based issuance to public securities and introduce stablecoin payments for on-chain trade settlement within regulated markets.
• Existing brokerages can handle tokenized securities without new licenses, while retail purchases and non-bank issuers face specific limits and requirements.

South Korea’s Financial Services Commission has unveiled a three-stage plan to tokenize stocks, bonds, and funds beginning in February 2027. According to the announcement, the roadmap expands blockchain-based securities beyond fractional investments and introduces established products into the country’s regulated capital market.

South Korea has approved amendments recognizing distributed ledgers as valid systems for recording and managing securities ownership. Those amendments will take effect on February 4, 2027, providing the legal foundation for the planned domestic infrastructure.

The opening stage will begin alongside the legislation and initially cover products serving institutional investors. Private money-market funds and privately placed corporate bonds will enter the blockchain-based market during this phase.

Additionally, regulators will introduce tokenized equities through trust structures involving shares from privately held companies. Investors will receive tokenized trust-beneficiary securities, while the underlying shares remain within South Korea’s existing securities system.

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Stablecoin Settlement Supports Final Tokenization Stage

Regulators will assess the opening stage’s stability, efficiency, market demand, and technical performance before authorizing broader participation. If the system meets those standards, the next stage will extend tokenization infrastructure to publicly offered securities.

However, authorities have not established a fixed implementation date because expansion depends on market conditions and technical readiness. The final stage will introduce onchain settlement connecting tokenized securities with stablecoins or other approved digital payment instruments.

Consequently, securities transfers and corresponding payments could occur through connected blockchain systems, simplifying separate settlement procedures. The FSC referenced BlackRock’s BUIDL tokenized fund and Hong Kong’s tokenized green bonds while developing its strategy.

Existing brokerages and trading companies may handle tokenized products without obtaining an additional financial license. Meanwhile, over-the-counter platforms must consult the Financial Supervisory Service before facilitating tokenized securities transactions.

Retail investors using those platforms will face an annual net-purchase limit of 100 million won per venue. That amount equals approximately $74,000, creating a defined exposure limit during the market’s early development.

Moreover, non-bank issuers managing investor accounts must maintain at least 4 billion won in equity capital. The requirement equals approximately $3 million and is accompanied by dedicated staffing rules for compliance, account management, and information technology.

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