South Korea Establishes Regulated Path for Tokenized Securities Trading

South Korea has made significant advancements in establishing a regulatory framework for security token offerings (STOs). The National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act.

Key Developments

The amendments define tokenized securities, encompassing all types of securities, including debt and equity instruments.
Beneficial for non-standardized investment contract securities like real estate, art, and livestock investments.
The Electronic Securities Act formalizes issuance and trading of tokenized securities using blockchain technology.
Qualified issuers can launch tokenized securities; these can be traded as investment contract securities on brokerages and other intermediaries.
Financial Services Commission (FSC) expects enhanced use of smart contracts in blockchain-based securities infrastructure.

Regulatory Progress

The bills will move to the state council, then signed by the president; expected to take effect in January 2027 after a one-year preparation period.
This move reflects global trends toward increased crypto regulation, prompted by events like the Terra-Luna collapse in 2022.
South Korea plans to introduce spot crypto Exchange Traded Funds (ETFs) by 2026, inspired by similar developments in the United States and Hong Kong.

For more detailed information, refer to the official government release.