South Korea Opens Stocks and Bonds to Tokenization, But Caps Retail Buyers

South Korea proposes rules for tokenised stocks and bonds

South Korea's Financial Services Commission (FSC) proposed detailed regulations that would let stocks, bonds and funds be issued and traded in tokenised form. The plan also covers certain fractional investment securities. It would formally recognise distributed ledgers as infrastructure for issuing and circulating securities. Under the proposal, a distributed ledger must be shared across two or more account managers, together with the Korea Securities Depository. The FSC said this structure supports the credibility and continuity of the record.

Issuers face capital and staffing thresholds

Companies that issue tokenised securities while directly managing customer accounts must hold at least 4 billion won, or about $2.8 million, in equity capital. The FSC also requires these firms to employ dedicated compliance and technology personnel. The thresholds aim to ensure account managers can run the shared ledger reliably. Operators would also be barred from charging a direct fee for use of the distributed ledger, according to the proposal.

Retail buyers face an annual purchase cap

The proposal creates a new over-the-counter (OTC) exchange licence for debt securities. Retail investors would be capped at 100 million won, around $70,000, in annual net purchases per OTC exchange. The limit restrains retail exposure while the tokenised market is still new. The OTC channel gives tokenised debt a dedicated venue separate from the main exchange. Eligible instruments span traditional securities such as stocks, bonds and funds, alongside fractional investment products that already trade in South Korea.

The rules take effect in February 2027

The FSC opened a public consultation that runs from 2 October to 11 November 2026. The regulator plans for the rules to take effect on 4 February 2027. They sit alongside amendments to the country's capital-market and electronic-registration laws. Those amendments recognise distributed ledgers as applicable infrastructure for the circulation of securities in South Korea.

Proposal follows a three-phase tokenisation roadmap

The rules build on a three-phase tokenisation roadmap that the FSC announced on 4 September 2026. The first phase, from February 2027, covers instruments such as institutional bonds and unlisted stocks held through trust arrangements. It also includes institutional private money market funds and publicly offered fractional investment securities. Later phases are set to expand to publicly offered standard securities and on-chain settlement. The FSC said it will decide the timing of the second and third phases later. The staged plan aims to widen tokenisation step by step rather than all at once.

Bitcoin holds above $86,000 as markets expand

The proposal arrives amid a firmer crypto market. Bitcoin stood at $86,909 at the time of publication, up 3.55% over the past 24 hours (CoinPaprika, 2 October 2026). The token still traded about 31% below its record high from 6 October 2025. The gap shows how far the market sits from last year's peak.

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