South Korea is betting on tokenized assets: part of a large-scale capital market reform
South Korea has announced the inclusion of infrastructure for tokenized securities in its strategic plan for modernizing the capital market. This involves a comprehensive reform that, in addition to introducing digital assets, provides for accelerating settlement cycles and extending trading hours. This is a significant step that could set a trend for all of Asia.
Expert Council and Roadmap
The development of the instrument's details has been entrusted to a public-private council led by the Vice Chairman of the Financial Services Commission (FSC). The council includes key players: the Central Depository, the Korea Exchange, and Samsung SDS's IT division. This composition ensures that the project will rely on both regulatory experience and technological expertise.
According to the plan, a roadmap for shortening the settlement cycle should be ready by October 2024. However, the key milestone is the launch of regulatory frameworks for tokenized securities. They are expected to come into effect in February 2027, following the adoption of subordinate legislation and the deployment of necessary infrastructure. Basic amendments to the legislation were approved by South Korea's National Assembly back in January 2026.
Why This Matters
Tokenization of securities is not just a buzzword. It is a way to make capital markets more accessible, liquid, and efficient. Accelerating settlements (e.g., from T+2 to T+0 or T+1) reduces counterparty risks and frees up capital. Extending trading hours, in turn, attracts international investors operating in different time zones.
From my perspective, South Korea's decision is an example of how forward-looking regulation can stimulate innovation rather than hinder it. Creating clear rules of the game three years before launch gives the market time to prepare and reduces uncertainty. If the project is successfully implemented, we will see a wave of similar reforms in other Asia-Pacific countries.