South Korea To Unveil Tokenized Securities Rules In July As Crypto Regulation Advances

South Korean authorities are set to release detailed rules for the issuance, infrastructure, and distribution of tokenized securities, as the country advances its efforts to implement crypto market regulations in 2027.

The changes are set to allow qualified issuers to launch tokenized securities using distributed ledger technology and enable the products to be traded as investment contract securities on brokerages and other licensed intermediaries.

FSC’s Vice Chairman Kwon Dae-young highlighted that the “upcoming token securities ecosystem must strike a balance between innovation and trust.” Therefore, the regulatory agency is reviewing measures to subordinate regulations and guidelines for the Tokenized Securities Act.

Discussing the best practices for eligibility and underlying assets, Kwon stated that the FSC will “We will uphold the fundamental principles of market order and investor protection, but we will not take a one-sided regulatory approach.” Notably, the regulator plans to allow the issuance of fractional investment securities by pooling underlying assets of the same type within a certain range.

He also explained that the government’s stance was to design a market structure that enhances trading efficiency, ensures fair competition, and protects users. The FSC’s Vice Chairman added that the regulator will add trading limits on OTC exchanges “in a way that allows the expansion of initial market liquidity while systematizing investor protection, so that the limits do not become a barrier stifling innovation.”

The upcoming rules for tokenized securities come amid South Korea’s push to regulate digital assets and the local crypto market. Over the past few years, the country has worked to develop a framework to supervise the crypto industry and protect users.

Alongside the Token Securities Institutionalization Act, the government is expected to implement the Income Tax Act in 2027, with the tax authority fast-tracking the development of a tax base and tracking system to end years of delays.

Under the Income Tax Act, crypto assets will be subject to a 20% income tax rate, up to 22% including local taxes, starting January 1, 2027. The financial authority plans to create a tax base by formally receiving pertinent data from crypto exchanges, establish a guidance framework for taxpayers subject to virtual asset income tax, and outline criteria for capital gains calculations.