Traditional assets like stocks and bonds are all set to exist in tokenized forms in South Korea. Regulators have introduced a roadmap for the same.
Heres what we know.
Legal recognition for tokenized securities
South Koreas Financial Services Commission [FSC] has introduced a three-phase roadmap to build the infrastructure needed for issuing tokenized securities. The plan covers assets such as stocks, bonds, and funds.
Under the upcoming changes, tokenized securities will receive legal recognition as digital representations of traditional securities.
The updated rules under the Act on Electronic Registration of Stocks and Bonds are scheduled to come into effect on February 4, 2027.
A three-phase plan by the FSC
The first phase will focus on giving legal recognition to tokenized securities. This will include institutional money market funds, bonds, unlisted stocks, and fractional investment securities.
The second phase will help expand tokenization to all publicly offered securities. In the final phase, the country will explore on-chain payments connected with stablecoins.
The roadmap is part of amendments to the Capital Markets Act and the Electronic Securities Act. Before the rollout begins, the FSC will work with the Korea Securities Depository [KSD] to develop the systems required for issuance and management.
In their press release, they also stated,
The FSC plans to introduce revision proposals for the subordinate statutes of the FSCMA and the Electronic Registration Act by the end of September this year.
This hasnt happened overnight
AMBCrypto previously reported that South Korea has been working on a digital asset framework. Stablecoins, crypto ETFs, and tokenized assets are among the key areas being discussed.
Until now, the countrys crypto regulations have focused on protecting investors, including rules around customer funds and market manipulation. The next step is to create clearer rules for newer parts of the industry, like tokenized assets and institutional involvement in the market.