South Korea's Financial Services Commission (FSC) has released a tokenized securities infrastructure roadmap outlining a three-stage plan to move stocks, bonds, and funds onto blockchain, beginning in February 2027 when the country's amended securities law takes effect.
A key feature of the framework is that tokenized securities issuers will not require new licenses. Existing brokers and securities firms can offer on-chain products under their current regulatory approvals.
Three-Phase Implementation Plan
Phase 1, launching in February 2027, covers institutional private money market funds, private bonds, unlisted stocks digitized through trust structures, and publicly offered small-lot fractional investment securities. Brokers must build distributed ledgers and connect them to the Korea Securities Depository (KSD). The FSC selected a narrow initial scope to limit infrastructure costs and operational risk.
Phase 2 will expand to publicly offered securities, though no date has been set. The FSC will evaluate the stability of Phase 1, private-sector technology readiness, and progress on stablecoin regulation before advancing.
Phase 3, the final stage, introduces on-chain settlement using stablecoins, enabling simultaneous trade and cash settlement on a single ledger. This would replace current T+1 and T+2 settlement with near-instantaneous delivery-versus-payment.
The legal groundwork is complete. On January 15, 2026, South Korea's National Assembly amended both the Electronic Securities Act and the Capital Markets Act. Subordinate rules and the full roadmap will be published for public consultation by the end of September 2026.
Private Sector Progress
Multiple large institutions are already building infrastructure. Koscom, a Korea Exchange subsidiary, is developing KoSTO, a shared issuance platform already signed by 12 securities firms, with Hyundai Motor Securities joining on September 1. Koscom is also preparing a stablecoin settlement proof-of-concept targeting launch before February 2027.
Shinhan Asset Management has signed a four-party memorandum of understanding with the Solana Foundation, Etherfuse, and Orca to build a Korean won-tokenized short-term bond fund for offshore institutions. Ripple previously conducted Korea's first tokenized government bond settlement with Kyobo Life.
Regulatory Classification and Challenges
The FSC has confirmed that tokenized securities are classified as securities, not crypto assets, placing them under capital markets law rather than Korea's 22% crypto tax effective January 2027. This classification distinction is significant for institutional buyers, pensions, insurers, and foreign funds.
However, Phase 3 faces a critical obstacle. The won-stablecoin legal framework, the Digital Asset Basic Act, remains in draft form, with the FSC and Bank of Korea at odds over stablecoin governance. Korea's banking giants are pursuing a won-backed stablecoin project through Project Hangang, but without clear legislation, full on-chain delivery-versus-payment cannot scale.
South Korea's approach differs from global competitors. BlackRock, JPMorgan, and Goldman Sachs are participating in DTCC trials for tokenized stocks and Treasuries, while the London Stock Exchange plans to tokenize UK equities in 2027. Seoul's model offers tokenized securities under a regulated, KSD-linked framework that classifies these instruments firmly within capital markets law.
