South Korea to Launch Tokenized Securities in February 2027

South Korea Sets Rules for Tokenized Securities, Launching in 2027

Seoul, South Korea – South Korea’s Financial Services Commission (FSC) has unveiled detailed regulations for tokenized securities, paving the way for stocks, bonds, and funds to be issued on blockchain technology starting February 2027. The new framework includes a minimum capital requirement of 4 billion Korean won for issuers and an annual over-the-counter (OTC) purchase limit of 100 million Korean won for retail investors.

This announcement marks the FSC’s first concrete regulatory blueprint following the release of a three-stage roadmap on September 4. The new framework, officially announced on October 2, permits the issuance and circulation of securities such as stocks, bonds, funds, and certain fractional investment securities in tokenized form. It also recognizes distributed ledger technology as a legitimate infrastructure for the issuance and trading of securities.

The proposal outlines specific requirements for companies that will issue and manage tokenized securities. Firms opting to manage client accounts directly, rather than outsourcing, must possess at least 4 billion Korean won (approximately $2.8 million USD) in equity capital and establish dedicated compliance and technology teams. This capital threshold effectively excludes smaller issuers, signaling the FSC’s approach to tokenized securities as a regulated activity akin to traditional financial services.

Compared to the minimum capital requirements for traditional South Korean securities firms, which typically range around 100 billion Korean won for general securities businesses, the 4 billion won threshold is considered relatively moderate. The FSC appears to be seeking a balance between risk control and fostering new entrants into the market.

Amendments to the Capital Markets Act will also introduce a new license for OTC exchanges specifically designed for the tokenized trading of debt securities. Retail investors will be subject to an annual net purchase limit of 100 million Korean won (approximately $70,000 USD) on any single OTC platform. Transactions exceeding this amount will need to be conducted through institutional channels.

The 100 million won limit serves as a clear demarcation of risk for retail investors, allowing them access to the tokenized bond market while keeping their exposure within manageable levels. For institutional investors seeking significant allocations, the introduction of OTC licenses is intended to provide the necessary liquidity infrastructure.

The proposal is open for public comment from October 3 until November 11. Following the consultation period, the regulations will proceed to the approval process, with the aim of taking effect on February 4, 2027, concurrently with the legislative amendments for distributed ledger infrastructure.