South Korea Passes Landmark Legislation to Regulate Tokenized Securities

South Korea's National Assembly has enacted pivotal amendments to the Capital Markets Act and Electronic Securities Act, establishing a legal framework for security token offerings (STOs). The legislation, effective January 2027 after a one-year implementation period, formally recognizes blockchain-based tokenized securities as regulated financial instruments.

The amendments enable qualified entities to issue digital securities representing real-world assets—including real estate, art, and livestock—using distributed ledger technology. Licensed brokerages will be authorized to trade these instruments as investment contract securities under Financial Services Commission oversight.

This regulatory clarity positions South Korea as a forward-looking jurisdiction in digital asset innovation. The two-year preparation window allows market participants to develop compliant infrastructure while anticipating increased institutional participation in blockchain-based capital markets.