Progress beyond the initial rollout will depend partly on market adoption and the outcome of pending stablecoin legislation.
South Korea’s Financial Services Commission unveiled a phased roadmap on September 4 for converting stocks, bonds and investment funds into blockchain-based tokens, with the earliest phase due to start in February 2027 once an amendment to the Electronic Registration Act takes effect.
The plan links the country’s securities market to a stablecoin payment system that regulators want built by the time the rollout reaches its final stage.
Seoul Lays Out a Three-Step Timeline
The FSC’s roadmap, presented during the third private-public consultative meeting on securities tokenization, breaks the transition into three stages.
Phase one starts in February 2027 and covers privately pooled money market funds and bonds reserved for institutional investors, unlisted stocks held through trust structures, and publicly offered fractional investment securities.
Phase two widens the pool to every type of publicly offered security. But the third phase is the more ambitious one: an on-chain payments system tied to stablecoins, though the FSC says the pace of phases two and three depends on how the first rollout goes, how fast the market adapts, and where pending stablecoin legislation ends up.
The commission also published model standards for fractional investment, capping individual subscriptions at whichever is smaller between 30 million won ($22,200) and 5% of an issuance, and requiring issuers to reserve a minimum retail allocation.
Trading tokenized securities over the counter won’t need a separate license, though firms must consult the Financial Supervisory Service first, and retail investors face an annual cap of 100 million won ($74,000) in net purchases per exchange.
You may also like:
Entities that manage tokenized securities accounts will need at least 4 billion won, which is about $2.9 million, in equity and dedicated staff for account management, internal control, and IT security, while the Korea Securities Depository is finalizing the technical checks that securities firms must pass before connecting to the shared ledger.
Revised rules under the FSCMA and the Electronic Registration Act are due by the end of September.
The Risk Other Regulators Have Already Flagged
As CryptoPotato reported previously, the IMF warned in an April note that tokenization strips out the settlement delays banks rely on to manage liquidity, delays that also give regulators time to step in before a crisis hardens.
The fund pointed to liquidity pressure, thin oversight of smart contracts, and the difficulty of policing assets that cross borders as the main risks, arguing that public infrastructure such as central bank digital currency (CBDC) is what keeps tokenized markets from making instability worse.
South Korea has also moved quickly against platforms it views as skirting its rules, with authorities blocking domestic access to Polymarket in August over concerns that the platform amounts to unlicensed gambling, joining a growing list of countries that have restricted it since last year.
Credit: Source link
