South Korea Announces Specific Rules for Tokenized Securities; Stocks, Bonds, and Funds to be On-Chain Starting February 2027

Coin Circle (120bTc.coM): On October 2, Beijing time, the South Korean Financial Services Commission (FSC) officially disclosed the specific regulatory details for tokenized securities. This marks the first executable regulatory blueprint following the official release of a three-phase roadmap on September 4. According to the latest announcement, stocks, bonds, funds, and specific niche investment securities in the traditional financial market are permitted to be issued and circulated in token form. More importantly, the regulatory authorities have formally recognized distributed ledger technology (DLT) as the core underlying infrastructure for the issuance and circulation of securities at the legal level.

Setting Entry Barriers for Issuance

On the asset supply side, the proposal sets clear standards for enterprises involved in the issuance and management of tokenized securities. If relevant institutions choose to directly operate customer accounts instead of entrusting third-party independent institutions, their own capital must start at 4 billion KRW (approximately 2.8 million USD) and are required to have dedicated compliance, internal control, and technology development teams. This criterion directly excludes startups with weaker risk resistance, indicating that the authorities view tokenized securities as a regulatory sector as rigorous as traditional financial businesses.

However, compared to the minimum capital entry line of about 100 billion KRW for traditional Korean brokerages, this threshold is relatively mild. This reflects the FSC's attempt to find the best balance between strictly controlling underlying financial risks and stimulating market vitality for new entrants.

Introducing OTC Licenses for Debt Securities

In the accompanying amendments to the Capital Markets Act, the authorities have specifically added an over-the-counter (OTC) licensing system for the trading of tokenized debt securities. On the investment side, to prevent the spillover of risks to retail investors, the proposal mandates that ordinary retail investors' total net purchases on a single OTC platform must not exceed 100 million KRW (approximately 70,000 USD); if the funding exceeds this limit, it must be allocated through qualified institutional channels.

This move aims to open the door to the tokenized bond market for the general public while firmly locking their risk exposure within an acceptable range. The introduction of the new OTC license will also provide necessary liquidity support for institutional capital intending to build large positions.

Countdown to New Regulations Coming into Effect

According to the legislative schedule, the proposal will officially open for public comment starting October 3, Beijing time, with the window period lasting until November 11. After collecting external feedback and completing the final approval process, the entire set of regulatory details and the legal amendments related to distributed ledger infrastructure are planned to come into full effect on February 4, 2027.

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