South Korea’s Financial Services Commission on September 4 unveiled a phased roadmap to convert stocks, bonds and investment funds into blockchain-based tokens, with the first phase expected to begin in February 2027 once an amendment to the Electronic Registration Law takes effect.
The plan links the country’s securities market to a stable payments system that regulators want to put in place before the rollout reaches its final stage.
Seoul presents three-stage timetable
FSCs road mappresented during the third private-public consultative meeting on securities tokenization, divides the transition into three stages.
The first phase begins in February 2027 and covers private money market funds and bonds reserved for institutional investors, unlisted shares held through trust structures and fractional investment securities offered to the public.
The second phase expands the pool to all types of security offered to the public. But the third phase is the most ambitious: an on-chain payments system tied to stablecoins, although the FSC says the pace of phases two and three depends on how the first rollout goes, how quickly the market adapts, and whether pending stablecoin legislation comes to fruition.
The commission also issued model standards for fractional investments, capping individual subscriptions at the smaller of 30 million won ($22,200) or 5 percent of an issue, and requiring issuers to set aside a minimum retail allocation.
Trading tokenized securities over-the-counter will not need a separate license, although companies must first consult the Financial Supervision Service, and retail investors face an annual cap of 100 million won ($74,000) in net purchases per exchange.
Entities that operate tokenized securities accounts will need at least 4 billion won, or about $2.9 million, in equity and staff dedicated to account management, internal control and IT security, while the Korea Securities Depository finalizes technical checks that securities companies must pass before connecting to the shared ledger.
Revised rules under the FSCMA and the Electronic Registration Act are expected by the end of September.
The risk that other regulators have already flagged
As CryptoPotato Previously reported, the IMF warned in an April note that tokenization removes the settlement times that banks rely on to manage liquidity, times that also give regulators time to intervene before a crisis hardens.
The fund highlighted pressure on liquidity, close monitoring of smart contracts and the difficulty of controlling assets that cross borders as key risks, arguing that public infrastructure such as central bank digital currency (CBDC) is what prevents tokenized markets from worsening instability.
South Korea has also moved quickly against platforms it sees as circumventing its rules, with authorities blocking domestic access to Polymarket in August over concerns the platform constitutes unlicensed gaming, joining a growing list of countries that have restricted it since last year.
The article South Korea plans stablecoin-based tokenization by 2027 appeared first on CryptoPotato.
About the Author
