PiCK
South Korea to Expand Tokenized Securities to MMFs, Private Bonds and Unlisted Shares From February
Summary
- Starting in February 2027, the scope of tokenized securities (ST) will expand to conventional financial products including MMFs, privately placed bonds, and unlisted shares.
- Authorities said they will review tokenization of public-offering securities for retail investors after the market stabilizes, along with a stablecoin-based on-chain settlement structure.
- Authorities said securities firms and over-the-counter exchanges with existing licenses will be able to handle tokenized securities within the scope of their current approvals, without a separate licensing regime.
Forecast Trend Report by Period
South Korea’s tokenized securities market will expand beyond fractional investment products from February 2027 to include conventional financial instruments such as money market funds, privately placed bonds and unlisted shares. Financial authorities plan to later broaden the market in stages to cover public-offering securities and stablecoin-based on-chain settlement.
The Financial Services Commission announced the policy direction on Sept. 4 at the third meeting of a joint public-private consultative body on tokenized securities.
From February 2027, tokenization will be allowed for privately placed MMFs for institutional investors and privately placed bonds. Unlisted shares will also be issued and traded as tokenized beneficiary certificates after existing electronic securities are placed in trust.
The range of fractional investment products allowed within the regulated market will also widen. Pooling, which bundles multiple assets with the same characteristics, will be permitted under certain conditions. Future receivables may also be used when the underlying contracts and investor-protection measures are in place.
After the initial market launch, authorities plan to expand tokenization to public-offering securities for retail investors. In the final stage, they will also review an on-chain settlement structure tied to stablecoin legislation that would allow securities and payment instruments to be exchanged directly on blockchain networks.
Authorities will not create a separate licensing regime for tokenized securities businesses. Securities firms and over-the-counter exchanges that already hold licenses will be able to handle tokenized securities within the scope of their existing approvals.
Kwon Dae-young, vice chairman of the Financial Services Commission, said tokenized securities would not be limited to fractional investment products. The government will connect existing financial products including stocks, bonds and funds from the perspective of a digital capital market, he added.
A revision to the Electronic Securities Act establishing the legal framework for tokenized securities will take effect on Feb. 4, 2027.
