South Korea Is Gearing Up to Institutionalize Security Tokens

The country's financial regulators plan to publish guidelines for security token issuance and distribution towards the end of 2022.

AccessTimeIconSep 7, 2022 at 3:32 p.m. UTC
Updated May 11, 2023 at 6:14 p.m. UTC

Financial regulators in South Korea want to bring security tokens, which are blockchain-based digital forms of traditional securities, into the scope of the country's capital markets rules in an effort to formalize the products.

The country's top financial regulators, including the Financial Services Commission (FSC) and Financial Supervisory Service, met with industry representatives like the Korea stock market (KRX) at a seminar on Tuesday to gather feedback on how to approach new rules.

Based on the opinions gathered at the policy seminar, the FSC plans to publish guidelines for the issuance and commercialization of security tokens by the end of 2022. Afterwards, it plans to modify the country's existing electronic securities and capital market regulatory frameworks to cover security tokens.

South Korea is speeding ahead with new plans to regulate the digital asset sector following after a turbulent market earlier this year slashed crypto prices and brought down some industry heavyweights. The FSC has vowed to accelerate new rules for the crypto sector, while anti-money-laundering authorities are scrutinizing crypto platforms operating in the country.

The Korea Institute of Finance, which provides in-depth analysis of the country's financial sector, has warned the crypto industry poses a major threat to South Korea's financial stability.

The current capital market and electronic securities systems in South Korea do not support blockchain technology, a summary of Tuesday's seminar said, adding that incorporating the issuance and distribution of security tokens into these frameworks is necessary to protect investors and financial stability.

The regulators also plan to set up a pilot through a regulatory sandbox to inform the formal institutionalization of security tokens.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.