South Korea legalizes tokenized securities, allowing blockchain-based stocks and bonds, with regulated trading set to begin in January 2027.
South Korea has taken a major regulatory step by approving laws that legalize tokenized securities.
The decision places blockchain-based assets within the country’s formal financial system. Lawmakers aim to support innovation while keeping existing market structures intact.
The framework is scheduled to take effect in January 2027.
South Korea Parliament Approves Blockchain Securities Laws
South Korea’s National Assembly approved amendments to the Capital Markets Act and the Electronic Securities Act. The vote took place during a plenary session.
These changes provide a legal foundation for issuing and trading tokenized securities.
The amended laws allow eligible issuers to create digital securities using distributed ledger technology.
These securities can represent assets such as stocks, bonds, and real estate. Issuance must follow existing financial rules and oversight standards.
The Electronic Securities Act now recognizes blockchain-based securities as lawful instruments.
This change allows digital records to replace traditional paper-based systems. Authorities stated the system integrates with current financial infrastructure.
Trading Framework and Role of Licensed Brokerages
The Capital Markets Act amendment allows tokenized securities to trade through licensed brokerages.
Financial intermediaries will manage transactions under existing investor protection rules. This structure keeps tokenized assets within regulated markets.
Officials said the goal is to include blockchain technology without replacing current systems. The framework supports account management through distributed ledgers.
It also allows automated processes during issuance and settlement.
The Financial Services Commission explained the approach in a statement. “We expect token securities to enable distributed ledger-based securities account management,” the FSC said. It also noted increased use of smart contracts.
Related Reading: South Korea to Reopen Corporate Crypto Trading Under Strict New Rules
Implementation Timeline and Regulatory Developments
This development follows recent regulatory updates in South Korea’s digital asset sector.
The Financial Services Commission confirmed finalized rules allowing corporate and institutional digital asset trading.
These changes ended nearly nine years of restricted corporate participation.
Global interest in asset tokenization continues to expand alongside South Korea’s actions.
Boston Consulting Group estimates the domestic tokenized securities market could reach $249 billion by 2030. Other financial institutions also project growth in international tokenization markets.
After parliamentary approval, the bill will move to the State Council and then require presidential promulgation. Officials expect the process to proceed without delay. The law is scheduled to take effect in January 2027.
Source: https://www.livebitcoinnews.com/big-win-for-digital-assets-as-south-korea-approves-tokenized-securities/
