South Korea to Tokenize Stocks, Bonds and Funds in 3 Stages as STO Law Hits in Feb 2027

South Korea’s Financial Services Commission (FSC) has published a tokenized securities infrastructure roadmap, mapping out a three-stage plan to put stocks, bonds, and funds on-chain, starting in February 2027, when the country’s amended securities law takes effect.

Crucially, tokenized securities issuers will not need new licenses. Existing brokers and securities firms can serve onchain products under approvals they already hold.

Ad

Ad

Korea’s 3-Step Tokenization Blueprint

The FSC plan follows a deliberate, phased structure. Step 1 launches at law go-live in February 2027.

It covers institutional private money market funds (MMFs), private bonds, unlisted stocks digitized through a trust structure, and publicly offered small-lot fractional investment securities.

Brokers must build distributed ledgers and connect them to the Korea Securities Depository (KSD). The regulator chose a narrow first wave to limit build cost and operational risk.

Step 2 expands the scope to publicly offered securities. No date is fixed. The FSC will assess the stability of the first wave, private-sector tech readiness, and progress on stablecoin regulation before moving forward.

Step 3, the endgame, introduces onchain settlement using stablecoins. That means a trade and its cash leg settle on the same ledger simultaneously.

For fund managers and cross-border desks, it replaces T+1 and T+2 with near-instant delivery-versus-payment.

The legal backbone is already done. On January 15, 2026, Korea’s National Assembly amended both the Electronic Securities Act and the Capital Markets Act.

CoinGape covered that milestone when South Korea approved tokenized securities, a foundational win for the country’s digital asset ambitions.

Today’s announcement is the missing implementation layer: the phased product map and the stablecoin settlement end-state.

Subordinate rules and the full roadmap will be published for public consultation by end of September 2026.

Ad

Ad

Who Is Already Building the Pipes

This is not a pilot-stage story. Multiple large institutions are already in build mode. Koscom, the Korea Exchange subsidiary, is standing up KoSTO, a shared issuance platform already signed by 12 securities firms.

Hyundai Motor Securities joined on September 1. Koscom is also preparing a stablecoin settlement proof-of-concept, targeting go-live ahead of February 2027.

Meanwhile, Shinhan Asset Management (~$96B AUM) has signed a four-party MoU with Solana Foundation, Etherfuse, and Orca to build a KRW tokenized short-term bond fund for offshore institutions, explicitly modeled on BlackRock’s BUIDL product.

Ripple had already set the tone earlier, pioneering Korea’s first tokenized government bond settlement in partnership with Kyobo Life. That pilot proved the country’s rails could handle sovereign debt onchain.

However, Step 3 faces a real bottleneck. The won-stablecoin legal framework, the Digital Asset Basic Act, is still in draft. The FSC and Bank of Korea remain at odds over stablecoin governance.

Korea’s banking giants’ won-backed stablecoin project is underway through Project Hangang, but without clear legislation, full onchain delivery-versus-payment cannot scale.

Korea is not building in isolation. Globally, BlackRock, JPMorgan, and Goldman Sachs joined the DTCC trial to tokenize stocks and Treasuries.

The London Stock Exchange is set to tokenize UK equities in 2027 via its partnership with Kraken’s parent Payward.

Seoul’s answer is to offer tokenized securities under a regulated, KSD-linked framework, a differentiated approach from offshore wrappers, and one that pulls these instruments firmly into Korea’s Capital Markets Act rather than its crypto tax regime.

That classification matters. Korea’s Finance Ministry has confirmed that tokenized securities are securities, not crypto assets.

That means they fall under capital markets law, not the 22% crypto tax that begins January 2027. For institutional buyers, pensions, insurers, foreign funds, that distinction clears a key compliance hurdle.

From on-chain data to charting, explore these free crypto tools every investor should know.