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- South Korea’s tokenized securities framework starts Feb. 4, 2027.
- Retail investors face a ₩100 million annual net purchase limit per OTC exchange.
- The first phase covers selected funds, bonds, unlisted stocks and fractional securities.
- Later stages expand the eligible market and target stablecoin-linked settlement.
South Korea has published the operating rules for bringing conventional securities onto blockchain infrastructure, moving its tokenization push from legislation toward a regulated market launch.
The Financial Services Commission (FSC) proposed subordinate rules on Oct. 1 covering distributed ledgers, issuer requirements and over-the-counter trading. The framework is scheduled to take effect on Feb. 4, 2027, while the proposed regulations are open for public comment through Nov. 11.
The change reaches beyond the fractional-investment products that have dominated South Korea’s earlier tokenization efforts. Stocks, bonds and funds can all ultimately be issued and circulated in tokenized form, but the regulator is deliberately opening that market in stages rather than allowing every security onto blockchain rails immediately.
Tokenization Changes the Register, Not the Security
The legal structure is important because South Korea is not creating a separate category of crypto assets.
A tokenized bond remains a bond under the Financial Investment Services and Capital Markets Act. A tokenized stock remains a security. What changes is the infrastructure used to record issuance, ownership and transfers.
The amended Electronic Registration Act legally recognizes distributed ledgers as securities registers. The FSC’s latest rules then specify how those ledgers must operate inside the existing financial system.
The model remains institutionally controlled.
Distributed ledgers must be shared across at least two account-management entities alongside the Korea Securities Depository (KSD). An issuer that wants to directly manage customer securities accounts will need at least ₩4 billion in equity capital, as well as dedicated account-management, internal-control and IT personnel. fsc.go.kr
This puts blockchain underneath the regulated securities market rather than outside it. Existing rules covering issuance, disclosure, trading and investor protection continue to apply.
Retail Investors Get a ₩100 Million Ceiling
The trading side of the framework introduces another important change.
South Korea plans to add an OTC exchange licensing category for debt securities, alongside existing categories covering unlisted stocks and non-monetary trust beneficiary certificates. The FSC expects tokenized circulation to make debt securities more accessible to individual investors.
Retail access will come with a defined limit.
An individual investor can make up to ₩100 million in annual net purchases on each approved OTC exchange, roughly $70,000 at current exchange rates. The ceiling applies separately to each venue rather than as one aggregate limit across the entire tokenized-securities market.
That creates room for retail participation without opening the new market without restrictions from day one.
South Korea’s Tokenization Rollout Has Three Stages
The FSC has separated the transition into three phases, with the later stages deliberately left without fixed launch dates. Their timing will depend on how the initial market performs, technological development and progress on separate stablecoin legislation.
The limited first stage is significant. Institutional money-market funds and bonds can begin testing the infrastructure without immediately moving the country’s entire public equities market onto distributed ledgers.
Unlisted stocks can also participate through trust structures, while publicly offered fractional investment securities provide another early use case.
The second phase is where the potential market expands substantially. The FSC intends to open tokenization to all publicly offered securities types, but has not committed to a date.
The final stage moves beyond tokenizing the asset itself.
Authorities ultimately want payment and settlement to operate onchain as well, including infrastructure linked to stablecoins. FSC Chairman Lee Eog-weon said earlier this year that overseas markets were already exploring stablecoins for 24-hour and T+0 securities settlement, an area South Korea wants its own infrastructure to be capable of supporting.
That stage depends partly on legislation governing stablecoins, so it should not be read as approval for stablecoin settlement when the first tokenized securities arrive in February.
Hanwha Is Building Before the Market Opens
The regulatory framework is arriving after some Korean financial institutions have already started building the technology needed to use it.
Hanwha Investment & Securities has completed a tokenized-securities platform developed with blockchain firm FairSquare Lab, according to Seoul Economic Daily. Development began in 2025, and the system is designed to support multiple distributed ledger technologies, including Avalanche and Hyperledger Besu.
The choice of Avalanche does not mean Korean tokenized securities will simply circulate freely across its public network.
Avalanche can support separate networks where participation and validation are restricted, while the FSC framework itself requires regulated entities to remain involved in maintaining securities records.
The KSD is also developing infrastructure capable of connecting with Avalanche, Hyperledger Besu and Hyperledger Fabric. Participation in those distributed ledgers is expected to remain limited to institutions such as the depository and authorized account managers.
According to Seoul Economic Daily, KSD said Avalanche support was added following requests from companies participating in token-securities consultations and related projects rather than being selected independently by the depository.
That overlap between private-sector systems and the depository’s infrastructure gives the February launch a more concrete technical base than a regulatory framework alone.
The next milestone comes before any tokenized security begins trading under the new regime. The FSC’s subordinate rules remain open for comment until Nov. 11, after which they move through the approval process.
Beyond the initial rollout, the indicators to watch will be how many issuers use the new framework, which OTC venues receive licenses and whether the first phase provides enough evidence for regulators to open publicly offered securities to tokenization.
