South Korea Clears Path for Tokenized Securities as $249B Market Comes Into Focus

• South Korea paves way for tokenized securities with new legislation.
• Tokenized securities expected to unlock $249B market by 2028.
• Blockchain infrastructure set to expand access to alternative investment products.

South Korea has advanced its digital finance agenda after lawmakers approved bills covering security token offerings, with the National Assembly passing amendments to the Capital Markets Act and the Electronic Securities Act during a plenary session. Notably, the legislation establishes a regulated pathway for blockchain-based issuance and trading of securities, as the Financial Services Commission stated that the framework aligns distributed ledger technology with existing capital market rules.

Under the revised Electronic Securities Act, qualified issuers can legally issue tokenized securities, while amendments to the Capital Markets Act allow these products to trade as investment contract securities through licensed brokerages. The FSC explained that the structure enables ledger-based securities account management and greater smart contract usage, and regulators also expect improved transparency across issuance, settlement, and record keeping.

Importantly, token securities now function as a broad legal category, allowing equity, debt, and other regulated instruments to adopt tokenized formats under regulatory supervision.

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Broader asset coverage and market expansion

The updated framework significantly expands access for non-standard investment contract securities, including real estate, art-linked assets, and livestock-related investment projects. Previously, distribution remained limited due to standardization and regulatory constraints, while the new rules allow wider participation with investor safeguards in place.

Officials indicated that tokenization could lower entry barriers and improve liquidity for alternative assets, as regulators emphasized strict disclosure and custody requirements. Following parliamentary approval, the bills will move to the State Council and presidential promulgation before taking effect in January 2027 after a one-year preparation period.

This development follows regulatory groundwork that began with FSC guidance issued in 2023, as authorities have since worked to integrate blockchain infrastructure into traditional finance.

Institutional coordination and industry readiness

The FSC will lead implementation alongside supervisory agencies and market participants through a consultation body that includes regulators and industry associations. Additionally, the group plans to develop ledger-based account systems and stronger custody protections, with a kickoff meeting scheduled next month.

Market forecasts underline why regulators are moving ahead, as Standard Chartered projected tokenized real-world assets could reach $2 trillion by 2028. Separately, a Hankyung report citing Boston Consulting Group estimated South Korea’s token securities market at ₩367 trillion, or $249 billion, by decade’s end.

This outlook has already influenced planning, with Mirae Asset Securities and Hana Financial Group advancing platforms and strategic collaborations. Meanwhile, South Korea continues preparing the Digital Asset Basic Act, positioning tokenized securities as a regulated extension of its capital markets.

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