South Korea approves legal framework for tokenized securities

The National Assembly passed revisions to the Capital Markets Act and the Electronic Securities Act, opening the door for blockchain to serve as core infrastructure for securities.

The amendments allow qualified issuers to create tokenized versions of virtually any type of security – including equity, debt instruments, and investment contracts. At the same time, brokers and other financial intermediaries will gain the right to trade these products within a regulated framework.

The country’s Financial Services Commission (FSC) said tokenized securities will enable the use of distributed ledgers for recordkeeping and smart contracts for executing investment transactions. Regulators expect the technology to simplify infrastructure, expand functionality, and increase market transparency.

The government highlighted that the framework is especially important for non-standard investment contracts – such as those tied to real estate, art, or livestock projects – where distribution has historically been restricted.

After passage in the National Assembly, the bill now moves to the State Council and then to the president for promulgation. Final approval is considered highly likely. A one-year transition period will follow, with the law set to take effect in January 2027.

To implement the new system, the FSC will form a working group with the Financial Supervisory Service, Korea Securities Depository, industry organizations, and outside experts. The plan includes building core infrastructure, such as distributed-ledger account-management systems and additional investor-protection mechanisms. The first meeting is scheduled for next month.

Interest in tokenization in the country is already rising. Boston Consulting Group projects South Korea’s tokenized-securities market could reach 367 trillion won ($249 billion) by the end of the decade. Major financial groups – including Mirae Asset Securities and Hana Financial Group – are already testing platforms and pilot programs.

In parallel, the country is preparing the Digital Asset Basic Act, a second major law that will define rules for stablecoins, crypto platforms, and potential spot crypto ETFs. Its final version is expected in the first quarter of this year.

South Korea continues to build one of Asia’s most advanced regulatory ecosystems for digital assets, positioning tokenization as a core pillar of the future financial market.