South Korea's National Assembly has passed comprehensive amendments to its Capital Markets Act and Electronic Securities Act, formally integrating Security Token Offerings (STOs) into the nation's legal and financial system. The legislation, passed on January 15, 2026, marks a pivotal shift, moving STOs from pilot programs to a fully regulated framework under the main financial law.
The amendments officially recognize blockchain-based digital securities and allow qualified companies to issue security tokens directly on a blockchain. A new issuer account management system has been established, effectively making blockchain technology a part of the national financial infrastructure. This legal clarity removes significant uncertainty for companies and investors, paving the way for the mass adoption of tokenized real-world assets like real estate, company shares, bonds, and investment funds.
The move culminates over three years of preparation led by South Korea's Financial Services Commission (FSC), which has been developing STO rules since 2023. Banks, brokerages, and tech firms have already conducted pilot projects, demonstrating benefits such as 20-30% faster settlement times, lower operational costs, and improved access for small investors through fractional ownership.
Analysts, including reports from Yonhap News Agency and Wu Blockchain, suggest this positions South Korea as a potential leader in asset tokenization within Asia, potentially ahead of rivals like Japan and Singapore. The development is expected to attract global investors seeking modern digital markets.
With the legal foundation now in place, financial institutions are poised to launch operational STO platforms. The market can expect to see tokenized real estate, bonds, and funds entering the South Korean market throughout 2026, though challenges around cybersecurity and investor protection remain.
