South Korea Targets Fully Tokenized Securities Market by February 2027

South Korea's financial regulators on Friday set out a roadmap to build the infrastructure needed to tokenize traditional securities and enable settlement using stablecoins. Officials from the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) said the plan would support tokenization of assets such as stocks, bonds and funds, and broaden security token offerings (STOs) beyond fractional investment products by February 2027. FSC Vice Chairman Kwon Daeyoung said authorities aim to "lay foundations" for tokenized issuance and secondary circulation across mainstream securities, with the longer-term objective of upgrading capital-market plumbing for a digitally connected market. South Korea is one of the world's most active retail investment hubs, with 11.3 million verified crypto users. Its stock market often posts daily turnover levels comparable to major crypto exchanges. Extending tokenization from niche fractional products to conventional securities would move the country closer to a fully digital capital-market infrastructure. The policy push comes as Asia's role in crypto markets expands. An Organization for Economic Cooperation and Development (OECD) report said the region recorded the fastest growth globally and accounted for 30% of worldwide stablecoin trading activity in 2025. Japan last week unveiled plans for a national blockchain settlement system for stocks and government bonds, targeting rollout in the early 2030s. Singapore this week finalized its stablecoin licensing framework. Under Korea's roadmap, phase one begins in February 2027 and covers securities governed by the Electronic Registration Act, money market funds and bonds for institutional investors, unlisted shares issued via trust structures, and publicly offered fractional investment securities. Phase two would extend tokenization to all publicly offered securities. Phase three would establish an onchain payment infrastructure linked to stablecoins. The timing of phases two and three will depend on phase one outcomes, market adoption of the technology and pending stablecoin legislation. Investor protections include caps on individual subscriptions set at the lower of 30 million won ($22,000) or 5% of total issuance volume, the FSC said. Annual net purchases on over-the-counter (OTC) exchanges will be limited to about $74,000. Licensed financial firms will be permitted to handle tokenized securities under their existing licenses. Issuers that manage their own securities accounts must maintain at least $3 million in equity capital and satisfy designated IT and cybersecurity requirements. The FSC said it plans to submit proposals to revise subsidiary legislation by the end of September.