Seoul Drops Tokenized Securities Rulebook, Gives TradFi Until Feb. 4, 2027 to Learn the Alphabet 📜

South Korea's Financial Services Commission has opened a public consultation on detailed regulations for issuing and trading tokenized securities, moving the country toward a Feb. 4, 2027 implementation of its blockchain-based capital markets framework. The proposal would permit stocks, bonds, funds and certain fractional investment securities to be issued and circulated in tokenized form, and explicitly recognizes distributed ledgers as infrastructure for issuing and circulating securities.

Under the draft, companies that issue tokenized securities while directly managing customer accounts would be required to hold at least 4 billion Korean won ($2.8 million) in equity capital and maintain dedicated compliance and technology staff. Separate revisions to capital markets regulations would introduce an additional over-the-counter exchange license dedicated to debt securities and cap retail investors at 100 million won ($70,000) in annual net purchases on each OTC exchange.

The rulemaking builds on a three-phase roadmap the FSC unveiled on Sept. 4 for migrating securities issuance and trading onto distributed-ledger infrastructure. The Korea Securities Depository is designated to serve as the central anchor point linking the traditional financial system to the new tokenized framework. The consultation period runs from Friday to Nov. 11 before the regulations proceed through an approval process.

The South Korean tokenization push is being closely tracked by public blockchain networks positioning for institutional and capital-markets workloads, including Avalanche ($AVAX), which has highlighted South Korea's tokenization plans as a potential growth channel. Regulators and industry participants have framed the framework as an effort to bring regulated securities activity on-chain under existing financial oversight rather than as a separate crypto-asset regime.