South Korea Unveils Tokenized Securities Roadmap for 2027

South Korea’s Financial Services Commission (FSC) has unveiled a three-stage roadmap for tokenized securities, setting the stage for stocks, bonds and investment funds to move on-chain beginning in February 2027.

The rollout will coincide with amended securities laws taking effect. Existing brokers and securities companies will be allowed to issue and service tokenized securities using their current licenses, avoiding the need for separate regulatory approvals.

The first phase will cover institutional private money market funds, private bonds, unlisted shares structured through trusts and publicly offered fractional investment securities. Participating brokers will need to establish distributed ledger infrastructure connected to the Korea Securities Depository (KSD).

The FSC is starting with a limited range of products to reduce operational risks and infrastructure costs. A second phase will eventually expand tokenization to publicly offered securities, although regulators have not established a launch date. Progress will depend on the stability of the initial rollout, industry technology readiness and South Korea’s stablecoin regulations.

The third phase would introduce stablecoin-based on-chain settlement, enabling securities and payments to settle simultaneously on the same ledger. Such a system could significantly shorten traditional T+1 and T+2 settlement cycles through near-instant delivery-versus-payment.

South Korea’s National Assembly amended the Electronic Securities Act and Capital Markets Act in January 2026, establishing the legal foundation for tokenized securities. Additional regulations and the detailed implementation roadmap are expected to enter public consultation by the end of September 2026.

Major financial institutions are already developing infrastructure. Koscom is building its KoSTO shared tokenized securities issuance platform with 12 securities firms, while Shinhan Asset Management has partnered with Solana Foundation, Etherfuse and Orca on a won-denominated tokenized short-term bond fund targeting overseas institutions.

However, stablecoin settlement remains a key challenge because South Korea’s Digital Asset Basic Act is still being drafted, with the FSC and Bank of Korea differing over governance.

Importantly, Korean authorities classify tokenized securities as securities rather than crypto assets. They will therefore fall under capital markets regulations instead of the country’s planned 22% crypto tax, potentially making the emerging market more attractive to institutional investors, pension funds, insurers and foreign asset managers.