South Korea Announces Three-Stage Plan to Tokenize All Securities by 2027

South Korea unveils roadmap for full securities tokenization

South Korea’s top financial regulator said on Friday that it will build a tokenization infrastructure that can be applied to "all types" of securities, including stocks, bonds, and funds.

The announcement followed the third meeting of a consultative body on tokenized securities that took place on the same day. South Korea has passed amendments that legally recognize blockchain-based securities, set to take effect on Feb. 4, 2027.

The Financial Services Commission (FSC) outlined a three-step plan to establish this new infrastructure. The ultimate goal is to allow participants to settle tokenized securities with stablecoins, which are digital currencies designed to maintain a stable value, typically pegged to a fiat currency like the US dollar.

Key details of the three-stage rollout

• Stage 1 (starting Feb. 2027): Tokenization of private money-market funds and private corporate bonds for institutional investors. Tokenization of equities begins with unlisted shares being tokenized through a trust, where the shares stay on the existing system, and investors receive a tokenized trust-beneficiary security.
• Stage 2: If the first stage proves stable and successful, the infrastructure will expand to publicly offered securities.
• Stage 3: Establishment of an onchain settlement infrastructure that allows investors to settle tokenized securities with stablecoins.

Regulatory requirements for market participants

Under the new rules, existing securities brokerages and trading firms can handle tokenized securities without needing an additional license.

However, over-the-counter exchanges must consult the Financial Supervisory Service first. Retail investors trading on such platforms are subject to an annual net-purchase limit of 100 million won ($74,000) per venue.

The FSC also set registration rules for non-bank issuers that want to run investor accounts for their own token securities. These institutions would need 4 billion won ($3 million) in equity capital and dedicated account, compliance, and IT staff.

Global context and references

The FSC cited BlackRock's BUIDL tokenized fund and Hong Kong's tokenized green bonds as key references for its plan. These examples demonstrate how large asset managers and other regions are already exploring the use of blockchain technology for traditional financial assets.

What is confirmed

The FSC has officially published a three-stage plan to tokenize all types of securities, with the first phase beginning in February 2027. Existing brokerages do not need extra licenses to participate, but over-the-counter exchanges face new consultation and retail investment limits. The plan aims for final-stage stablecoin settlement.

What is still unclear

The article does not specify the exact timeline for Stages 2 and 3 beyond the condition that Stage 2 follows a "stable and successful" Stage 1. Details on the specific technical implementation or the selection of blockchains for the infrastructure are not provided.

Why this matters

This move positions South Korea as one of the major economies creating a structured legal framework for tokenized traditional assets. It signals regulatory comfort with blockchain technology for securities and could pave the way for more efficient trading and settlement processes if the three stages are implemented as planned.

Sources

• The Block