South Korea has advanced landmark legislation that formally recognizes and regulates the issuance and trading of tokenized securities, marking a significant step toward integrating blockchain technology into its capital markets. Lawmakers approved amendments to key financial laws that establish a legal framework for blockchain based securities, allowing them to function within the country’s existing regulatory system. The move positions South Korea among the most proactive jurisdictions in addressing security token offerings and digital representations of traditional financial assets. Under the new framework, tokenized securities will be treated as legitimate financial instruments rather than experimental products, bringing clarity to issuers and investors alike. Authorities have emphasized that the goal is to combine the operational efficiencies of distributed ledger technology with established investor protection standards, ensuring transparency, accountability, and regulatory oversight as digital securities adoption expands.
The legislative changes amend both the Capital Markets Act and the Electronic Securities Act, defining how tokenized securities can be issued, distributed, and traded. The revised rules allow eligible issuers to create securities using blockchain infrastructure while requiring trading to occur through licensed intermediaries such as brokerages. Regulators have described tokenized securities as a broad category covering equity, debt, and investment contract products rather than a narrow crypto asset class. Oversight will be led by the Financial Services Commission in coordination with the Financial Supervisory Service and market infrastructure providers. Officials say the framework could unlock new opportunities for assets that have historically faced distribution constraints, including securities linked to real estate, cultural assets, and alternative investment projects, while maintaining safeguards against market abuse.
Following approval by the National Assembly, the legislation will move through the state council and presidential promulgation, a process widely expected to conclude smoothly. The laws are scheduled to take effect in January 2027 after a preparation period intended to allow market participants to build supporting systems. Industry consultations are expected to begin soon to develop ledger based account management tools and operational standards. The initiative builds on earlier guidance released by regulators in 2023 and reflects growing confidence in tokenization as a practical financial tool. Global forecasts suggest strong growth potential for tokenized assets over the coming years, and South Korea’s early regulatory clarity may give domestic financial institutions a competitive advantage as digital securities become more widely adopted.
