South Korea pivots to institutional digital finance

South Korea is shifting from a retail-centered crypto market toward institutional digital finance as regulators prepare to permit roughly 3,500 corporate virtual-asset accounts and the Bank of Korea schedules phase-two trials of deposit tokens with AI agents for late 2026.

Andrew Park, chief executive of Factblock and organizer of Korea Blockchain Week, says demand in Seoul has moved from retail trading to questions about custody, tokenization and settlement from overseas banks and asset managers. Park noted a change in inquiries from market prices and token listings to practical matters such as custody arrangements, stablecoins, payment rails and regulatory access to the Korean market.

Regulatory changes include a framework from the Financial Services Commission to open corporate virtual-asset accounts for listed companies and registered professional investors, covering about 3,500 entities. The National Assembly passed amendments to the Electronic Securities Act and the Capital Markets Act that bring tokenized real-world assets and security tokens under a single statutory framework.

The Bank of Korea has completed initial trials for real-world deposit tokens as part of Project Hangang. Officials plan second-phase institutional tests of deposit tokens and related infrastructure in late 2026, with prototypes that can settle transactions and link to operational systems.

Park says resolving routine operational issues is key for institutional participation. He pointed to account access, custody, payment and settlement finality, accounting definitions and compliance as areas that must be addressed. He added that banks and custodians focus on how systems handle failed or contested transactions and on who bears responsibility when problems occur.

Technical experiments have tested wholesale deposit tokens used by autonomous AI agents to execute conditional transactions, such as paying for data or computing resources in real time. In those tests, AI models used deposit tokens to make automated payments, illustrating a use case for on-chain settlement when many small, immediate transactions are required.

South Korea’s widespread high-speed internet, high digital literacy and public and private investment in Web3 and AI are cited as factors that support such experiments. Authorities have favored targeted legal amendments and pilot programs rather than a single comprehensive digital-asset law, allowing regulators, banks and market participants to address operational gaps across multiple fronts.

Planned second-phase tests by the central bank and the opening of corporate virtual-asset accounts are scheduled steps that will expand access to institutional participants and test the technical and legal infrastructure currently under development.