South Korea just voted to make tokenized securities a reality, and it’s not a drill. On Thursday, the National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act, officially setting up the legal plumbing for security token offerings (STO). It’s the kind of move that makes crypto Twitter wake up and actually pay attention to regulation for once.
This decision throws open the doors for regulated, blockchain-based issuance and trading of tokenized securities in the country. The legislation basically institutionalizes the use of distributed ledger technology for these financial products—turning what was once a crypto dream into a regulated reality. The amendments to the Electronic Securities Act let qualified issuers launch tokenized securities, while tweaks to the Capital Markets Act allow them to be traded as investment contract securities on brokerages and other intermediaries.
The Financial Services Commission (FSC) expects these changes to enable distributed ledger-based securities account management and a heavier use of smart contracts. The term "token securities" has been established as a broad category applicable to all kinds of securities, including debt and equity. The government noted this is particularly beneficial for non-standardized investment contract securities—like those tied to real estate, art, or livestock projects—that were previously stuck in regulatory purgatory with limited distribution.
Following the legislature's approval, the bills will move to the state council and then be promulgated by the President, with a high likelihood of passing. The laws are set to take effect in January 2027, after a one-year preparation period. This follows years of groundwork, after the FSC first issued related guidelines in 2023—proving that in crypto, patience is sometimes a virtue, even if it feels like watching paint dry.
The FSC will lead the implementation, forming a consultation body with the Financial Supervisory Service, Korea Securities Depository, Financial Investment Association, industry participants, and experts. They aim to develop supporting infrastructure, including distributed ledger-based account management and enhanced safeguards, with a kick-off meeting scheduled for next month. It’s basically a crypto-all-star team assembling to build the playground for the rest of the market.
Market forecasts are bullish. Last October, Standard Chartered predicted that the market cap for tokenized real-world assets (RWAs), excluding stablecoins, is expected to expand sharply to $2 trillion by 2028 from $35 billion at the time of the report. According to a report from Hankyung, the Boston Consulting Group forecasted that the South Korean token securities market will grow to be worth around 367 trillion won ($249 billion) by the end of this decade—numbers that would make even the most hardened degen’s eyes light up.
Major local players, including Mirae Asset Securities and Hana Financial Group, have already started advancing related platforms and collaborations. Meanwhile, South Korea is preparing the Digital Asset Basic Act, the nation's second comprehensive regulatory framework. The proposal under development is expected to formalize rules for ongoing initiatives, including won-pegged stablecoins and the country's first spot crypto ETFs. The final version of the legislation is anticipated in the first quarter of this year, because apparently, 2024 is the year Korea decided to stop sleeping on crypto.
