South Korea’s financial regulator, the Financial Services Commission (FSC), has drafted rules allowing traditional assets to migrate to blockchain networks. Through amendments to the Electronic Securities Act and the Capital Markets Act, instruments such as stocks, bonds, and investment funds will gain a formal legal framework as token securities starting February 4, 2027.
Retail investor access to these new digital instruments will be subject to a ceiling. FSC rules restrict retail investors from purchasing more than 100 million won, or approximately $73,700, per year on licensed over-the-counter (OTC) platforms.
Three Implementation Phases Leading to Stablecoins
The transition of traditional assets is divided into three phases. Starting in February 2027, the initial phase focuses on facilitating privately placed money market funds, bonds for institutional investors, tokenized trusts for unlisted stocks, and fractional investment securities for the public. Traditional publicly offered equities will follow in subsequent stages, although the FSC has yet to determine an implementation timeline.
The final phase of the roadmap will integrate token securities infrastructure with onchain payment systems. This stage opens up the potential use of stablecoins across networks, though implementation remains dependent on domestic stablecoin legislation that is still pending legislative review.
Capital Requirements and IT Staffing
Entities seeking to register as token issuer account managers must satisfy stringent operational criteria. The regulator mandates a minimum equity capital of 4 billion won. Operators must also employ accounting specialists, compliance personnel, and at least two information technology professionals. Furthermore, distributed ledgers used to record securities must connect directly to the Korea Securities Depository (KSD) infrastructure.
To prepare KSD’s infrastructure ahead of the regulatory rollout in February, Samsung SDS has stepped in to build the technical systems.
Financial Institutions Secure Their Positions
Several South Korean brokerage firms have moved early to establish their presence. KB Securities signed agreements with Securitize and the Optimism Foundation to develop tokenized funds. Meanwhile, Hanwha Investment & Securities has reportedly finalized its tokenized securities platform connected to both the Avalanche and Hyperledger Besu networks.
Another partnership was forged between Kakaopay Securities and Dinari on September 29, when they announced an initiative to tokenize South Korean equities targeted exclusively at foreign investors. The infrastructure readiness across these diverse institutions highlights robust market appetite for the upcoming 2027 framework.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
