South Korea is moving decisively to anchor blockchain-based securities inside its mainstream financial system, marking one of the clearest regulatory endorsements of tokenization by a major economy to date.
Rather than treating tokenized assets as a fringe innovation, lawmakers and regulators are shaping rules that position them as a natural extension of existing capital markets.
Key Takeaways
South Korea has created a clear legal framework for issuing and trading tokenized securities within its existing financial system
Blockchain-based securities will be treated as regulated investment contract assets, not experimental instruments
The new rules take effect in January 2027, giving institutions time to prepare infrastructure and compliance
A legal green light for blockchain securities
The shift follows the approval of legislative amendments by the National Assembly of South Korea, which updated both the Capital Market Act and the Electronic Securities Act. Together, these revisions formally recognize securities issued and recorded on distributed ledger technology, removing a long-standing gray area that had limited institutional adoption.
Under the revised framework, qualified issuers are allowed to issue securities directly on blockchain-based ledgers, while investors can trade them through regulated brokerages and financial intermediaries. By classifying tokenized assets as investment contract securities, lawmakers ensured they fall under familiar supervisory structures rather than creating an entirely new asset class.
Integration over disruption
South Korean regulators have been explicit about their intent. Tokenization is not meant to replace existing market infrastructure, but to enhance it. The Financial Services Commission (Financial Services Commission) views distributed ledgers as a way to modernize how accounts are managed and how transactions are processed.
By using shared ledgers and smart contracts, authorities expect issuance, settlement, and post-trade processes to become more automated and efficient. This could reduce reconciliation costs, limit operational errors, and improve transparency, while still keeping securities firmly within a regulated environment.
A delayed rollout with strategic intent
Although the legislation has passed parliament, it will now move to the State Council and then to presidential promulgation, steps widely seen as formalities. The more notable detail is timing. The new rules are scheduled to take effect in January 2027, giving financial institutions several years to build infrastructure, test platforms, and align compliance frameworks.
This phased approach suggests policymakers are prioritizing stability and readiness over speed, aiming to avoid market disruption while still capturing long-term benefits.
The tokenization framework arrives alongside other regulatory changes. South Korea recently finalized rules allowing corporations and institutional investors to trade digital assets, reversing nearly a decade of restrictions. Taken together, these moves signal a broader shift toward cautious but deliberate integration of blockchain technology into the financial sector.
Global context and market potential
South Korea’s approach mirrors growing international momentum. In the United States, regulators have begun easing guidance to encourage institutional experimentation, while major financial players are already deploying live tokenized products. JPMorgan, for instance, has launched a tokenized money market fund on the Ethereum.
Market projections highlight why governments are paying attention. Boston Consulting Group estimates South Korea’s tokenized securities market could reach roughly $249 billion by the end of the decade. On a global scale, Standard Chartered expects tokenized assets to grow into a $2 trillion market by 2028.
