South Korea Approves Legal Framework for Security Token Offerings

South Korea’s National Assembly passed amendments to the Capital Market Act and the Act on the Electronic Registration of Stocks and Bonds on January 15, institutionalizing Security Token Offerings.

These amendments establish a legal framework for blockchain-based security tokens, potentially transforming digital securities, impacting real-world assets, and enhancing investor protection in the financial landscape.

South Korea Paves Way for Security Token Issuance by 2026

On January 15, South Korea’s National Assembly approved amendments to the Capital Market Act and the Act on the Electronic Registration of Stocks and Bonds, enabling security token offerings. This legislative change allows eligible issuers to issue security tokens directly, introducing a new framework integrating blockchain technology for enhancing securities security. The amendments include an issuer custody account system and regulatory oversight for over-the-counter exchanges, with implementation expected in early 2026.

The amendments legally differentiate issuance from distribution processes to bolster investor protection. This regulatory shift could significantly impact the tokenization of real-world assets, with potential market expansion projections of up to 367 trillion won by 2030. Although industry insiders express enthusiasm, no direct market movements or asset changes were confirmed in the immediate aftermath.

Industry observers noted the legislative move as crucial for the future integration of security tokens into financial systems. Shin Beom-joon, Chairman of the Token Securities Council, commented, “The industry is poised for significant growth as these amendments pave the way for innovation in security token offerings.”

Experts Weigh in on South Korea’s Regulatory Shift in Blockchain

Did you know? Since 2021, South Korea has explored blockchain integration in securities, culminating in an expected transformation by 2030, leveraging past sandbox frameworks for developments.

According to CoinMarketCap, Ethereum’s price is $3,325.29, reflecting a 0.33% decrease over the past 24 hours. Despite various market fluctuations, Ethereum has shown a 13.67% increase over the last 30 days. The 24-hour trading volume stands at $31.16 billion, a decline of 9.27%.

Coincu’s research team observes that regulatory clarity, like South Korea’s latest move, might pave the way for wider blockchain application in traditional finance. As market players adapt to this regulatory framework, broader integration of blockchain technology into real-world assets remains possible, potentially reshaping financial exchanges and investment avenues globally.