South Korea passes security token law, partners with Italy on AI

This week saw progress and regression in South Korea’s digital asset space, alongside an agreement with Italy to cooperate on artificial intelligence (AI).

The country passed legislation creating a legal framework for security token offerings under existing securities law, just as Google Play (NASDAQ: GOOGL) announced it will block unregistered overseas digital currency apps from updates and downloads in the country, starting January 28. Meanwhile, South Korea’s President agreed on January 19 to expand cooperation with Italy on AI and other sectors.

Tokenized securities amendment

South Korea has progressed a new legal framework for tokenized securities, in the form of amendments introducing “security tokens” to the country’s existing ‘Act on Electronic Registration of Stocks and Debentures’ (Electronic Securities Act) and ‘Act on Capital Markets and Financial Investment Business’ (Capital Markets Act).

The amendments, passed by a plenary session of the National Assembly on January 15, create a regulated pathway for the issuance and trading of tokenized securities on distributed ledgers, institutionalizing their use across debt, equity, and investment contract products.

The new framework defines tokenized securities as securities that record and manage information on issuance and distribution on a distributed ledger based on blockchain technology. The Electronic Securities Act was amended to allow for the use of blockchain technology to provide information on the issuance and distribution of securities, while the Capital Markets Act was amended to allow for the circulation of investment contract securities through securities companies.

Oversight of the area will fall to the Financial Services Commission (FSC), South Korea’s top finance sector regulator, with the laws set to take effect in January 2027, following a one-year preparation period.

“In order to recognize such a distributed ledger as a securities account book with legal effect and to provide stability, etc., it was necessary to amend the law,” said the FSC, in a press release. “Through this, it is expected that small and medium-sized enterprises and small businesses will be able to securitize various projects and raise business funds through the capital market.”

The regulator added that the newly built blockchain infrastructure will “enable distributed ledger-based securities, account management and greater utilization of smart contracts.”

The FSC said it also plans to form a joint ‘Token Securities Council’ with relevant agencies and interested parties—including the Korea Securities Depository, academics, and industry participants—so that a “full-fledged token securities ecosystem can be opened,” as soon as the law comes into effect.

Google Play restrictions

Under the policy, digital asset exchanges and software wallets can only publish in the named jurisdictions if they comply with the relevant local laws and industry standards.

For South Korea, this means developers must successfully file a virtual asset service provider (VASP) report with the Commissioner of the Korea Financial Intelligence Unit (KoFIU)—the country’s anti-money laundering and counter-terrorism financing authority—to be listed and downloadable on the Google Play Store.

Thus, beginning January 28, Android users in South Korea will no longer be able to download or update apps from unregistered overseas exchanges.

So far, only 27 domestic platforms have reportedly completed FIU registration, including Upbit and Bithumb. Major international digital asset exchanges such as Binance, Bybit, and OKX remain unregistered, meaning their apps will soon be blocked from new downloads and updates on the South Korean Google Play Store.

Coming the same week that South Korea advanced a legal framework for tokenized securities, it may be seen as one step forward and two steps back for the digital asset space in a country that was among the top jurisdictions in the world for digital currency adoption in 2025.

But digital assets aren’t the only innovative tech that has recently drawn lawmakers’ attention.

Back to the top ↑

Italy AI agreement

On Monday, Reuters reported that South Korean President Lee Jae Myung met with Italian Prime Minister Giorgia Meloni, who is visiting the country for summit talks, to expand cooperation across a range of sectors, including AI, aerospace, chips, and critical minerals.

Among the agreements, South Korea and Italy reportedly signed a memorandum of understanding (MoU) for chip industry cooperation, including those related to AI.

According to a report from Industry Research, South Korea’s superconductor market was valued at $284.24 million in 2025 and is forecast to reach $529 million by 2034, with a 15% share of the booming Asia Pacific market and a compound annual growth rate of 7.10%.

AI research, development, and funding have become a growing priority for South Korea, as they are for many countries around the globe. Last Autumn, the South Korean government announced an 8% increase in its 2026 budget to expand investment in AI—the largest rise in government expenditure in four years.

“We are now in the era of an AI transformation, and if we fall behind in so-called ‘physical AI,’ we will have no future,” said Finance Minister Koo Yun-cheol at the time. “That is why next year’s budget is larger in scale, with more aggressive restructuring than in previous years.”

The country’s latest MoU seemingly builds on this drive to remain relevant in the rapidly evolving AI race.

As reported by Reuters, Meloni and Lee also agreed to strengthen joint efforts to develop resilient, reliable critical mineral supply chains, as well as to discuss collaboration on joint research projects.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

Back to the top ↑

Watch: The AI wave is here—are marketers ready?