South Korea Sets Deadline for Tokenized Securities

South Korea has formally moved to institutionalize tokenized securities. Signaling one of the clearest national frameworks yet for bringing blockchain-based financial instruments into regulated markets.

The decision marks a structural shift rather than an experiment. Embedding digital representations of traditional assets inside the country’s capital markets rulebook, instead of treating them as fringe innovation.

A vote by the National Assembly has approved legislation. Establishing a dedicated legal framework for tokenized securities with implementation scheduled for January 2027.

The law creates explicit rules for issuing, distributing, and trading tokenized securities under existing financial oversight structures, rather than ad hoc pilot programs.

According to the FSC, the framework aligns tokenized assets with current securities standards, while recognizing their distinct technical infrastructure. Including distributed ledgers, digital custody, and automated settlement processes.

What the New Framework Covers

The legislation defines tokenized securities as digital representations of traditional financial instruments. Such as bonds, shares, and investment contracts recorded on blockchain-based systems rather than conventional registries.

Issuance must occur through licensed financial institutions with clear disclosure obligations, investor protections, and compliance monitoring, similar to traditional securities markets.

Trading venues handling tokenized assets will also require authorization. Ensuring market surveillance, anti-manipulation controls, and operational resilience requirements.

The law further establishes rules for digital custody and recordkeeping. Acknowledging that ownership verification may rely on cryptographic proofs rather than centralized databases.

The commission indicated that intermediaries will need to demonstrate technical safeguards. Including key management standards, cybersecurity controls, and continuity planning to prevent data loss or operational disruption.

Why the 2027 Timeline Matters

The delayed rollout to January 2027 gives regulators, financial institutions, and infrastructure providers time to adapt existing systems rather than forcing immediate compliance.

The FSC said this transition period will allow banks, brokerages, and asset managers to integrate blockchain-based settlement with traditional clearing systems while maintaining regulatory oversight.

According to the commission, the phased approach also aims to prevent market fragmentation by ensuring interoperability standards and consistent supervisory practices before large-scale issuance begins.

The National Assembly’s approval signals that South Korea intends to move tokenized securities from limited pilots into mainstream finance under a nationally coordinated framework.

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