South Korea Approves Tokenized Securities Framework in Historic Legislative Victory

South Korea’s National Assembly has passed landmark amendments to the Capital Markets Act and the Electronic Securities Act, establishing a legal framework for tokenized securities. This move positions the country to capture a projected $250 billion digital asset market by 2030. The new regulations allow qualified issuers to tokenize and trade various assets, including equity, debt, and real-world assets such as real estate and art according to the framework.

The framework emphasizes firm-led assessments to ensure compliance with regulatory standards, offering flexibility while maintaining oversight. This approach enables rapid adaptation to market developments without compromising investor protection.

Tokenized securities will allow for 24/7 settlement and programmable compliance features, which traditional infrastructure cannot match. These operational advantages are expected to drive cost reductions and improve capital efficiency for institutional investors.

Why Did This Happen?

Regulatory clarity has long been a barrier to institutional adoption of digital securities. South Korea’s new framework addresses this by aligning tokenization with existing securities laws while incorporating blockchain-specific requirements.

The timing of the legislation aligns with a growing institutional appetite for tokenized assets. In late 2025, tokenized equity trading volumes exceeded $88 million in single weeks, reflecting strong demand for regulated digital securities infrastructure.

How Did Markets React?

The approval has already sparked optimism among market participants. Tokenized assets are projected to reach $2 trillion in market capitalization by 2028, driven by increased adoption and regulatory support.

Institutional investors are showing strong interest in tokenized securities, particularly in the context of market volatility. As traditional cryptocurrencies face uncertainty, regulated tokenized securities offer a safer alternative with blockchain benefits.

What Are Analysts Watching Next?

South Korean authorities have set a one-year preparation period before the laws take effect in January 2027. During this time, the Financial Services Commission will lead implementation efforts, including consultations with industry participants and infrastructure development.

The FSC is also working on the Digital Asset Basic Act, a second regulatory framework expected in early 2026. This law will formalize rules for stablecoins and spot crypto ETFs, aligning with the broader goal of integrating digital assets into the financial system.

Analysts are closely watching how tokenized assets perform in the coming months. With institutional participation in tokenized stock trading already reaching 82%, the success of South Korea’s framework could influence regulatory approaches in other jurisdictions.

The approval of tokenized securities in South Korea represents a significant step forward for digital finance. By providing a clear legal structure and investor protections, the country is positioning itself as a global leader in the tokenization of real-world assets.

Market observers expect the new framework to attract international capital and foster innovation in financial infrastructure. As the global economy shifts toward digital solutions, South Korea’s approach may serve as a model for other nations seeking to balance innovation with regulation.