Korea plugs tokenized securities into capital-markets glow-up 🪙

South Korea's Financial Services Commission launched a capital market infrastructure review on Tuesday, folding token securities into a wider package of reforms that includes faster settlement, extended trading hours and broader use of artificial intelligence. The commission said the initiative will coordinate efforts across government agencies and market operators, with token securities plans developed separately through a public-private council and then linked to the broader program.

The framework builds on amendments approved by the National Assembly in January that recognize blockchain-based distributed ledgers as valid securities registries and permit the issuance and circulation of token securities. According to the FSC, the framework is scheduled to take effect in February 2027, after regulators complete subordinate rules and supporting infrastructure. At the second meeting of its public-private token securities council in May, the commission said it was targeting July for the release of proposed subordinate regulations and guidelines.

Infrastructure work is already underway. Samsung SDS said in May that it had won a Korea Securities Depository (KSD) contract to build a token securities management platform connecting the depository's existing electronic securities account system to blockchain-based data, with completion aimed at February 2027. Separately, the FSC said it expects a roadmap by October for shortening the securities settlement cycle, and a KSD system for settling over-the-counter trades in unlisted shares and fractional investment products by the end of 2026.

FSC Vice Chairman Kwon Dae-young said the initiative would build on broader efforts to improve the capital market, guided by four policy priorities: trust, shareholder protection, innovation and market access. The commission said detailed token securities plans will continue to be discussed by the public-private council before being connected to the wider review, which it described as part of South Korea's preparations for a real-time, continuously accessible and integrated digital market.