Korea’s Financial Services Commission outlines tokenization roadmap

South Korea’s Financial Services Commission (FSC) has unveiled a structured, multi-phase roadmap to integrate tokenized securities and fractional investments into the national financial system. The initiative follows legislation passed earlier this year that officially recognizes securities recorded on distributed ledger technology, with the first phase set to commence in February 2027. Initially, institutional investors will gain access to tokenized money market funds and bonds, while both retail and institutional participants can engage with unlisted stocks and fractional investments via trust structures. The FSC has prioritized trust beneficiary certificates as the primary format for these fractional assets during the initial rollout. A second phase is planned to expand support to public securities, followed by a third phase that aims to incorporate stablecoins for settlement purposes. This phased approach allows the FSC to calibrate regulatory oversight based on market adoption rates and the future passage of specific stablecoin legislation. By establishing this clear regulatory framework, South Korea is positioning itself as a significant jurisdiction for the institutional adoption of blockchain-based financial instruments.