South Korea advances tokenized securities rules ahead of 2027 rollout

What happened

South Korea’s financial regulator proposed detailed rules for tokenized (representing an asset as a tradable entry on a blockchain) securities, including capital requirements, OTC trading licenses and retail investment limits. South Korea’s Financial Services Commission has proposed detailed regulations for issuing and trading tokenized securities as the country’s regulatory framework is set to take effect in February 2027.

The proposal also introduces requirements for companies issuing and managing tokenized securities. Under the proposed changes, companies issuing tokenized securities while directly managing customer accounts would need at least 4 billion Korean won ($2.8 million) in equity capital and dedicated compliance and technology staff.

Separately, revisions to capital markets regulations would create an additional over-the-counter exchange license for debt securities and cap retail investors at 100 million won ($70,000) in annual net purchases on each OTC exchange. The proposal builds on a three-phase roadmap unveiled on Sept.

The proposed regulations are scheduled to take effect on Feb. The changes would allow stocks, bonds, funds and certain fractional investment securities to be issued and circulated in tokenized form.