- South Korea creates a legal path for blockchain securities within its regulated financial markets.
- The new rules allow tokenized assets to trade through brokerages under existing market systems.
- The framework expands access for real world assets while keeping strong investor protections.
South Korea has moved to formally integrate blockchain-based securities into its financial system through new legislation approved by the National Assembly. The amendments provide a legal foundation for issuing and trading tokenized securities using distributed ledger technology. The decision places South Korea among jurisdictions actively shaping rules for asset tokenization within regulated markets.
Reforms on the Electronic Securities Act and the Capital Markets Act were approved by the National Assembly, through a plenary session on Thursday. The move was affirmed by government officials soon after the vote. The laws will now be submitted to the State Council prior to presidential promulgation. Authorities expect the remaining steps to progress smoothly. The framework will take effect in January 2027, following a preparation period.
Legal Framework Anchors Tokenized Securities
The revised Electronic Securities Act allows qualified issuers to issue securities in digital form using blockchain systems. These digital securities receive the same legal recognition as traditional electronic securities. At the same time, the amended Capital Markets Act permits their trading through brokerages and approved financial intermediaries.
The legislation defines tokenized securities broadly. It covers equity, debt, and investment contract securities. This approach ensures the framework applies across existing asset classes. Officials stressed that the system integrates blockchain tools into current markets. It does not seek to replace established financial infrastructure.
The changes also enable ledger-based account management. This allows securities ownership records to operate on distributed ledgers. As a result, issuers and intermediaries can automate parts of issuance and settlement. Smart contract functionality becomes easier to apply within regulated boundaries.
Expanded Access for Non-Standard Assets
The framework also addresses limitations faced by non-standard investment products. Assets linked to real estate, art, or project-based ventures often faced distribution challenges. Under the new rules, these investment contracts can be structured as tokenized securities. This expands access while maintaining regulatory oversight.
Market participants view this as a key shift. Tokenization allows fractional ownership and improved recordkeeping. However, all offerings remain subject to existing investor protection rules. Regulators intend to maintain the same compliance standards applied to conventional securities.
The Financial Services Commission will oversee implementation. It plans to coordinate with the Financial Supervisory Service and market institutions. Industry participants and technical experts will also take part. A consultation body will guide infrastructure development and operational standards.
Policy Shift Aligns With Broader Regulatory Changes
The legislative move follows another policy adjustment. South Korea recently finalized rules allowing corporate and institutional digital asset trading. This ended nearly nine years of restrictions on corporate participation. Together, these steps signal a controlled expansion of digital finance access.
Global trends also influence the strategy. International regulators have begun easing barriers for institutional tokenization experiments. Large financial firms already operate tokenized funds and settlement platforms. These developments have increased pressure on markets to provide legal clarity.
Forecasts suggest significant growth potential. Analysts project strong expansion for tokenized real-world assets over the coming years. Local financial groups have already started developing platforms and partnerships. Several institutions now prepare products aligned with the upcoming framework.
Next Phase of Digital Asset Regulation
South Korea continues work on the Digital Asset Basic Act. In December, South Korea announced plans to wrap up stablecoin rules in January. This upcoming legislation represents the country’s second major digital asset framework. It aims to formalize rules for stablecoins and spot crypto exchange-traded funds. Lawmakers expect a finalized version in the first quarter.
Together, these measures reflect a gradual, regulated approach. Authorities prioritize market stability while allowing innovation. The tokenized securities framework stands as a central component of that strategy.
