South Korea Asses Bill To Regulate And Enable Tokenized Securities

TLDR

• South Korea’s National Assembly passed amendments legalizing security token offerings.
• The law takes effect in January 2027 after a one-year preparation period.
• Tokenized securities will include assets like real estate, art, and livestock.
• The Financial Services Commission will lead infrastructure development.

South Korea has officially approved a legal foundation for tokenized securities through amendments to its Capital Markets Act and Electronic Securities Act. These changes create a regulated path for blockchain-based security token offerings (STOs), including their issuance and distribution using distributed ledger technology.

Set to take effect in January 2027, the new law will allow qualified entities to issue tokenized securities and enable brokerages and intermediaries to trade them as investment contract securities.

Legal Amendments Establish National Framework

During a plenary session held on January 15, 2026, South Korea’s National Assembly passed the amendments that define token securities broadly. The updated laws apply to both standardized and non-standardized securities, including debt and equity instruments.

The Electronic Securities Act allows approved issuers to use blockchain technology to issue tokenized securities. The Capital Markets Act then authorizes these securities to be traded on licensed brokerages. This legislative move provides legal certainty for firms looking to use distributed ledger technology for financial products.

According to the Financial Services Commission (FSC), “We expect token securities to enable distributed ledger-based securities account management and greater utilization of smart contracts.”

Implementation and Timeline

The laws are scheduled to go into effect in January 2027. A one-year preparation period will begin after the President’s official promulgation, which is highly likely following the National Assembly’s vote.

The FSC will oversee implementation and will work with the Financial Supervisory Service, Korea Securities Depository, and other market participants. A consultation body will be formed to support the development of infrastructure.

Planned efforts include distributed ledger-based account management systems and improved investor protection mechanisms. A kickoff meeting involving all stakeholders is scheduled for next month to begin these preparations.

Focus on Real-World Asset Tokenization

The new framework is expected to support a wide range of assets. These include traditional securities as well as non-standardized products like real estate, artworks, and livestock investment contracts.

Such investment products were previously harder to distribute due to legal and structural limitations. The new regulations will now enable wider participation by allowing them to be tokenized and traded more easily.

Standard Chartered has forecasted that the global tokenized real-world asset (RWA) market, excluding stablecoins, may reach $2 trillion by 2028. Locally, Boston Consulting Group expects the South Korean token securities market to grow to 367 trillion won ($249 billion) by the end of the decade.

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