South Korea is positioning itself among the global leaders in tokenization. Lawmakers have approved key legislative changes that officially allow the issuance and trading of tokenized securities based on blockchain technology, integrating digital assets as a full-fledged part of the country’s financial system.
Parliament Lifts the Ban and Opens the Door to Blockchain-Based Securities
The National Assembly of South Korea has passed amendments to the Capital Market Act and the Electronic Securities Act during a plenary session. These changes establish a clear legal foundation for issuing and trading tokenized securities that rely on distributed ledger technology (DLT).
Revisions to the Electronic Securities Act permit eligible issuers to issue securities in digital form. Meanwhile, amendments to the Capital Market Act allow these assets to be traded through licensed brokerages and financial intermediaries as investment contract securities.
Tokenization Is Meant to Complement, Not Replace, Existing Markets
South Korean regulators stress that the goal of the new framework is not to dismantle the traditional financial system, but to enhance it with modern technology. According to the Financial Services Commission (FSC), the framework enables securities account management via blockchain-based ledgers and significantly expands the use of smart contracts in both issuance and settlement processes.
The regulator expects tokenized securities to improve efficiency, transparency, and automation—areas where traditional financial infrastructure is often costly and slow.
Law to Take Effect in 2027
Following parliamentary approval, the legislation will be submitted to the State Council and then to the president for promulgation, a step widely expected to be procedural. The new legal framework is scheduled to come into force in January 2027.
This move is part of a broader regulatory shift in South Korea. Earlier, the FSC confirmed it had finalized rules allowing corporate entities and institutional investors to trade digital assets, effectively ending nearly nine years of restrictions on corporate participation in the crypto market.
Global Momentum Behind Tokenization
Interest in asset tokenization is accelerating worldwide. U.S. regulators recently issued guidance aimed at lowering regulatory barriers and encouraging institutional experimentation with tokenized financial products.
Major financial institutions are already capitalizing on this trend. JPMorgan, for instance, has launched a tokenized money market fund built on the Ethereum blockchain.
Market Forecasts Point to Rapid Growth
Analysts anticipate strong expansion in the coming years. Boston Consulting Group estimates that South Korea’s tokenized securities market alone could reach approximately $249 billion by the end of the decade. Standard Chartered projects that the global tokenization market could grow to as much as $2 trillion by 2028.
By approving this legislation, South Korea reinforces its ambition to become a major global hub for digital finance and blockchain innovation.
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