Key points
- Phase one in February 2027 excludes listed stocks
- Listed-stock tokenization is a KRX pilot with no date
- Phases two and three have no dates
- Stablecoin settlement depends on further legislation
South Korea's Financial Services Commission published a three-phase plan on Friday, September 4, to let stocks, bonds and funds be issued as blockchain tokens. The first phase starts in February 2027 and covers private money market funds and private bonds sold only to institutions, tokenized trust certificates backed by unlisted shares, and publicly offered fractional-investment securities, the slices of art, buildings and other assets that Korea already lets retail investors buy. Listed stocks are not part of it. Tokenizing listed stocks is a Korea Exchange pilot project with no start date, and the two later phases, including settlement in stablecoins, depend on further steps.
The FSC held the third meeting of a public-private council on token securities, chaired by Vice Chairman Kwon Dae-young, and put out a policy direction in three steps. Phase one begins when the amended Electronic Registration Act takes effect in February 2027. Phase two would extend tokenization to publicly offered securities. Phase three would connect stablecoins as a means of payment so that trading and settlement both happen on a distributed ledger.
The document is careful about what comes after phase one. It says phases two and three depend on how stable and efficient the first phase turns out to be, on how fast market participants build, and on a legal framework for stablecoins. Stablecoin settlement depends on further legislation.
For listed stocks, the FSC says it will study how the New York Stock Exchange and Nasdaq are running their own tokenized-stock pilots and then verify a model and run a demonstration centered on the Korea Exchange. That is a test, not a migration. The announcement does not change how investors currently trade listed Korean shares.
Kwon emphasized the plan's broader ambition, saying the regulator "will not confine token securities to fractional investment alone," a reference to the fact that until now Korea's tokenization talk has mostly been about selling slices of paintings and buildings.
Securities firms remain cautious about implementation, Financial News reported on Sunday. One industry official told the paper that issuance becomes possible in February but real business would only pick up from the second half of 2027. The reasons given were the systems that still need to be built, the lack of a proven way to make money from tokenized issuance, and the fact that brokers are busy making good money in their regular business after this year's trading boom.
From February 2027, the amended law will recognize distributed-ledger registration for securities, with the initial rollout covering the products outlined above. The announcement does not change existing routes for US investors to buy Korean stocks, including those covered in our guide.
