Both parent laws, due to kick in from February 4, 2027, will expand the scope of tokenization in the country. The current regime only permits fractional investment products to be represented on the blockchain.
The proposal presented today will expand the umbrella to cover conventional securities, including stocks, bonds and funds. The FSC’s statement confirmed that it will put it alongside non-monetary trust beneficiary certificates and investment contract securities.
The rollout is progressing according to the phased, but flexible timeline laid out by the regulator on September 4.
- Stage 1: Privately placed money market funds and bonds for institutional investors, unlisted stocks through a trust structure, and publicly offered fractional investment securities.
- Stage 2: Publicly offered securities
- Stage 3: On-chain settlement layer tied to stablecoins.
Who can issue tokenized securities in South Korea?
The FSC draft listed the conditions that issuers must meet to issue tokenized securities in the country, including sharing distributed ledgers across the Korea Securities Depository, plus at least two account management entities. The regulator also clarified that they cannot charge a direct fee for using the ledger.
The new “issuer account management entity” category now allows companies issuing tokenized securities to manage customer accounts as well. Only financial firms could offer this service in the past.
However, firms looking to advance into the “issuer account management entity” category must first meet certain FSC conditions:
- Must hold at least 4 billion won in equity capital
- Have a staff that includes one account-management specialist, one internal-control specialist and two IT specialists.
On the trading side, the proposal adds an over-the-counter licensing unit for debt securities, joining the existing units for unlisted stocks and non-monetary trust beneficiary certificates.
The FSC also set investor-protection limits for retail investors, capping their annual net purchases on each OTC exchange at 100 million won.
The same lawmakers want to delay January crypto tax again
While that framework moves ahead, pressure is building on the separate crypto income tax set for January 1. The levy treats profits from transferring or lending digital assets as miscellaneous income, taxed at 20% on annual gains above a 2.5 million won deduction.
Cryptopolitan has reported the effective rate at 22% once a 2% local surcharge is added. Gains made in 2027 would first be filed and paid in May 2028.
The calls to delay the tax regime have come from both sides of the political divide, with Rep. Min Byung-duk of the ruling Democratic Party and Rep. Kim Jae-seop of the People Power Party advancing separate propositions to kick the can as far as 2030.
Rep. Song Eon-seog has moved to scrap the tax clauses, Rep. Jung Sung-kook has proposed a 2030 start, and Rep. Kim Sang-hoon a 2029 date, according to The Korea Times and Cryptopolitan.
A fourth delay after three already
Industry and investors are leaning the same way. The Digital Asset eXchange Alliance has told lawmakers that exchanges still lack a standardized data network with regulators and need more time to build and test it.
A Tiger Research survey conducted with Chainalysis found 73.7% of 2,423 Korean investors opposed the plan, The Korea Times reported, and a citizen petition seeking a delay cleared 50,000 signatures, sending it to the National Assembly’s Strategy and Finance Committee, per Cryptopolitan.
The government is holding its line. Finance Minister Lee Hyoung-il backed the January start on September 28, saying 85% of investors hold crypto worth less than 5 million won and would owe little or nothing after the deduction.
The tax was written for a 2022 launch and has already slipped three times, to 2023, 2025 and now 2027, which is why the current push would mark a fourth postponement.
