Major firms redirect focus as South Korea formally legalizes tokenized securities

South Korea has approved a legal framework for tokenized securities, which formally recognizes blockchain-based issuance and tokenized assets within the existing financial system.

The National Assembly passed amendments to the Electronic Securities Act and Capital Markets Act in mid-January after an unsuccessful bid to pass a previous tokenization amendment bill in 2023.     

“The amendments represent a milestone in mainstreaming blockchain for capital markets in South Korea,” said Sean Lee, Senior APAC Advisor at Crypto Council for Innovation. “ It’s designed to elevate tokenized securities from experimental pilots to regulated instruments encompassing debt, equity and investment contracts.”

South Korea’s capital markets are seen as particularly receptive to tokenization. It has one of the world’s most active retail crypto markets with individual investors contributing to huge trading volumes on domestic exchanges.

“The rapid growth of domestic crypto users and trading volumes shows that blockchain technology has become an enduring part of the financial landscape rather than a transient phenomenon,” said Woosuk Song, partner attorney at VEAT law firm in Seoul and former senior advisor to Binance.

Tokenization is set to improve company access to funding, increase transparency, and give investors exposure to assets that were previously difficult to trade.

Korean firms are exploring tokenization for real estate, investment funds, infrastructure, data centers, and even plane mileage points.

Tension between old tech vs new tech

Boston Consulting Group projects that tokenized securities could more than triple by the end of the decade, from $80 billion today to approximately $250 billion by 2030. South Korean startups and firms alike are eager to tap into the sector’s expected growth.

But fintech startups have complained that securities firms have been given priority in the pre-licensing process.

“Securities firms are at the center of the STO ecosystem,” explained Song. “Current regulations require tokenized securities to be issued by licensed securities companies with regulatory approval.”

Korea’s tokenization legislation separates issuance and distribution of tokenization as a way to protect investors and prevent conflicts of interest.

“Blockchain and fintech companies have been positioned to serve primarily as technology enablers rather than acting as issuers themselves,” said Song. 

But, blockchain firms warn that relying solely on large financial institutions could delay innovation in the rapidly evolving digital asset market.

South Korea’s main financial watchdog, the Financial Services Commission (FSC), unexpectedly postponed a January 14 vote on the pre-approval of tokenized STO over-the-counter trading platforms after mounting criticism.

Lawmakers and blockchain innovator LucentBlock said the proposed licensing framework sidelines early sandbox pioneers in favor of large institutional players.

Hanwha’s on-chain ambition

Hanwha Investment and Securities is looking to transform into a digital asset-specializing securities firm.  

At its 2026 management strategy meeting held last year, CEO Byung-ho Jang said global financial markets are rapidly reorganizing around digital assets.

He said the firm aims to strengthen its competitiveness in global digital finance by focusing on real-world asset (RWA) tokenization.

The firm aims to support on-chain transactions in which issuance, custody, and trading of digital assets are handled in real time on blockchain networks. It plans to build a network of a blockchain capable of processing large volumes of transactions with high speed and scalability.

On January 29, Hanwha Securities said it plans to invest KRW 10 billion ($7 million) in digital asset platform, Xangle, to strengthen cooperation on digital asset data, research and expanding global business infrastructure.  

Mirae Assets tokenization breakout moment

RWA tokenization is shaping up as the next major investment theme. 

Mirae Asset Group plans to develop an investment ecosystem built around RWA as a way to drive future growth for clients.

“Capital is often locked up for more than seven years in venture investments,” said Chairman Hyeon-Joo Park. “Tokenization could change that by making these assets tradable.”

Park told Korean media that his firm plans to bring about KRW 120 trillion ($82 billion) in client assets on-chain as part of a round-the-clock digital trading ecosystem.

Building tokenization railing

Despite regulatory clarity, Korea’s STO market is expected to scale slowly.

South Korea has provisionally set January 2027 as the date for full-scale market operation. This leaves 12 months to establish investor protection, operational rules, as well as a blockchain-based account management system.

Starting from February 2026, regulators will formulate these protocols with a consultative group consisting of the Korea Securities Depository, the Korea Financial Investment Association, as well as a host of securities and fintech companies and academics.

Woosuk Song said regulators are wary of tokenized assets that are backed by illiquid and hard-to-value assets. These will need enhanced disclosure, clear risk warnings, and stricter sales practices before they are available on the market.

He said Korea’s early phase of tokenized securities will most likely focus on assets with predictable returns, such as real estate-backed securities and project finance investments.

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