New Legal Framework for Tokenized Securities Passes in South Korea

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South Korea has approved a bill to create a legal structure for security token offerings. This development opens a regulated channel for blockchain-based issuance and trading of tokenized securities in the nation.

On Thursday, the National Assembly passed key amendments during a plenary session. The changes to the Capital Markets Act and the Electronic Securities Act were noted in an official government announcement.

The legislation formally establishes the use of distributed ledger technology for issuing and distributing tokenized securities. The updated Electronic Securities Act allows eligible entities to create tokenized securities, while the revised Capital Markets Act permits their classification and trading as investment contract securities.

The Financial Services Commission expressed expectations that token securities will foster distributed ledger-based account management and increased smart contract utility. “We also anticipate more active use of smart contracts in blockchain-based securities infrastructure,” the commission said.