South Korea's financial regulator placed tokenized securities infrastructure within a broader capital-market modernization plan covering faster settlement, longer trading hours and digital transformation.
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South Korea folds token securities into market overhaul by 2027
South Korea's Financial Services Commission folded token securities infrastructure into a broader capital-market overhaul on Tuesday, alongside plans for faster settlement, longer trading hours and greater use of artificial intelligence.
"The capital market infrastructure review meeting will coordinate reforms across government agencies and market operators," FSC Vice Chairman Kwon Dae-young said, adding that the initiative is guided by four policy priorities: trust, shareholder protection, innovation and market access.
The initiative includes a roadmap for shortening the securities settlement cycle, expected by October, and a Korea Securities Depository system for settling over-the-counter trades in unlisted shares and fractional investment products by the end of 2026. Token securities plans will be discussed separately through a public-private council before being linked to the wider initiative, the FSC said.
The move places tokenized securities within South Korea's broader effort to modernize traditional financial markets, potentially bringing blockchain-based investment products closer to systems used for mainstream securities settlement and trading. The token securities framework, approved by the National Assembly in January, is scheduled to take effect in February 2027.
Token securities framework targets February 2027
South Korea's token securities initiative predates the latest capital-market review. In January, the National Assembly approved amendments recognizing blockchain-based distributed ledgers as valid securities registries and permitting the issuance and circulation of token securities.
The FSC said it is targeting July for the release of proposed subordinate regulations and guidelines, following the second meeting of its public-private token securities council in May. The framework is scheduled to take effect in February 2027, after regulators complete subordinate rules and supporting infrastructure.
Technical infrastructure is also under development. Samsung SDS said in May that it had won a KSD contract to build a token securities management platform that connects the depository's existing electronic securities account system to blockchain-based data. The company aims to complete the platform by February 2027, when the new framework takes effect.
South Korea's approach differs from jurisdictions that have pursued standalone digital-asset laws. By embedding tokenized securities within the existing capital-market infrastructure — the KSD settlement system and the electronic securities registry — the FSC is creating a framework where blockchain-based instruments operate alongside traditional securities. The regulatory clarity could attract institutional capital to South Korea's digital-asset market as the 2027 framework approaches.
This article is for informational purposes only and does not constitute investment advice.
