South Korea’s Financial Services Commission (FSC) presented a proposal on Thursday to expand tokenized trading to conventional stocks, bonds and funds from February 4, 2027. The regulator opened a comment window from October 2 to November 11, 2026 under the Financial Investment Services and Capital Markets Act and the Electronic Registration Act. The changes would move beyond the current regime, which only permits fractional investment products to be represented on the blockchain, and include non-monetary trust beneficiary certificates and investment contract securities.
The rollout follows a phased timeline announced on September 4: first privately placed money market funds and bonds for institutional investors, unlisted stocks through a trust structure, and publicly offered fractional investment securities; second publicly offered securities; third an on-chain settlement layer tied to stablecoins. Under the draft, issuers must share distributed ledgers across the Korea Securities Depository and at least two account management entities, and cannot charge a direct fee for ledger use. A new issuer account management entity category would allow issuing companies to manage customer accounts if they hold at least 4 billion won in equity capital and employ one account-management specialist, one internal-control specialist and two IT specialists. The FSC also added an over-the-counter licensing unit for debt securities and capped retail investors’ annual net purchases on each OTC exchange at 100 million won.
Meanwhile, lawmakers from both major parties are pushing to delay the crypto income tax scheduled for January 1, 2027. The levy would tax gains from transferring or lending digital assets as miscellaneous income at 20% on annual gains above a 2.5 million won deduction, or about 22% including a local surcharge. Proposals include delaying the start to 2029 or 2030, or scrapping the tax clauses. The Digital Asset eXchange Alliance has warned that exchanges still lack a standardized data network with regulators, while a Tiger Research and Chainalysis survey reportedly found 73.7% of Korean investors opposed the plan. A citizen petition seeking a delay cleared 50,000 signatures. Finance Minister Lee Hyoung-il has backed the January start, arguing 85% of investors hold crypto worth less than 5 million won and would owe little or nothing after the deduction.
Separately, the FSC is studying whether licensed market makers should be introduced after the yen-linked token JPYC spiked on Upbit. JPYC opened won pairs on September 17 with a reference price near 8.8 won, but trades climbed to 37.6 won within about an hour, more than four times the reference. The move was driven by a secondary-market squeeze rather than a reserve collapse: new demand hit a shallow order book while transferable supply was limited and Korean holders could not redeem at par on Upbit. Once additional tokens reached the venue, the premium faded, leaving some buyers with losses. FSC digital finance policy director Yoo Young-joon said the commission will review whether market-making tools should be introduced to improve efficiency and stability. The review is expected during work on the second-stage Digital Asset Basic Act. Existing rules under the Virtual Asset User Protection Act do not exempt market making from market-manipulation bans, meaning continuous two-sided quoting can be treated as unlawful price influence. Industry participants want future rules to address initial circulating supply, issuance and redemption channels, designated liquidity providers and disclosure when prices drift from a reference.
