South Korea is preparing to introduce a comprehensive regulatory framework for tokenized securities by July, marking a significant step in the country’s broader efforts to regulate digital assets ahead of major legal changes set for 2027. The Financial Services Commission (FSC) will unveil the new rules during the second meeting of the Token Securities Council, a public-private initiative established earlier this year to oversee the sector’s evolution.
This regulatory push follows the recent passage of the Token Securities Institutionalization Act by the National Assembly, scheduled to take effect in early 2027. The legislation amends existing financial laws to permit qualified issuers to use distributed ledger technology to create and distribute tokenized securities. These digital products will be tradable as investment contract securities through licensed brokerages and intermediaries, integrating blockchain technology with traditional capital markets.
The FSC’s Vice Chairman emphasized the need for a regulatory framework that balances innovation with investor protection. The commission will issue subordinate regulations and guidelines to operationalize the Act, while crafting a phased roadmap to gradually tokenize standardized securities such as stocks and bonds. This approach reflects international best practices, ensuring smoother on-chain settlements and market stability.
Among key provisions under review, the FSC plans to enable fractional investment securities by pooling assets of similar types, facilitating broader market participation. Trading limits will be established on over-the-counter (OTC) exchanges to expand initial liquidity without imposing rigid barriers that could hamper market innovation. The FSC aims to create a market environment promoting trading efficiency, open competition, and strong safeguards for users.
South Korea’s move to regulate tokenized securities aligns with its broader crypto market supervision strategy. Alongside this legislative development, the government is fast-tracking the implementation of digital asset taxation frameworks, including the Income Tax Act, which is also slated for 2027 enforcement. The National Tax Service has begun developing systems to track crypto-related tax obligations, signaling an end to delays that have hindered tax clarity for digital assets.
These regulatory advances indicate South Korea’s commitment to integrating cryptocurrency and digital securities within a secure, transparent financial ecosystem. By introducing clear rules and protections, officials seek to foster innovation while maintaining market integrity and protecting investor interests.