South Korea's financial regulator confirmed this week it will publish a tokenized securities framework in July, as the country's broader crypto rulebook takes shape. The Token Securities Institutionalization Act — already passed — is set to take effect on February 4, 2027, amending the Electronic Securities Act and the Capital Markets Act. Meanwhile, the crypto income tax, locked in at 20% (up to 22% with local surcharges), will hit on January 1, 2027, and the tax authority has already begun collecting exchange data.
Tokenized securities: the July roadmap
The Financial Services Commission (FSC) is now drafting subordinate regulations and guidelines for the Tokenized Securities Act, according to the agency. The July document will lay out a phased roadmap for tokenizing stocks and bonds, including on-chain settlement procedures. Qualified issuers will be allowed to issue tokenized securities using distributed ledger technology and trade them as investment contract securities on brokerages and licensed intermediaries.
The FSC also plans to permit fractional investment securities — effectively letting platforms pool underlying assets of the same type within a certain range into tradeable tokens. To balance liquidity and investor protection, the regulator will impose trading limits on over-the-counter exchanges handling these instruments.
Crypto tax: 2027 is locked in
Any lingering hope of delaying or scrapping the crypto income tax appears dead. The National Tax Service has begun full-scale preparations, including obtaining transaction data directly from exchanges and establishing compliance guidance. A bill led by the People Power Party and an online petition to postpone the tax have gained little traction; authorities are committed to the January 1, 2027 rollout.
The tax rate is 20% on crypto gains, plus a 2% local income surtax in most jurisdictions, bringing the effective top rate to 22%. That’s lower than South Korea’s top marginal income tax rate for traditional assets, but still a stiff levy for a market that has operated largely untaxed.
Stablecoin legislation stuck in limbo
Not everything is moving forward. Stablecoin legislation has been stalled since late 2025, caught in a turf dispute between the Bank of Korea (BOK) and the FSC. The central bank wants oversight of stablecoin reserves and issuance, while the FSC argues it should fall under its capital markets framework. Neither side has budged, and no bill has been introduced in the National Assembly.
The delay means South Korea has no legal framework for fiat-referenced tokens, even as other Asian jurisdictions — Japan, Singapore, Hong Kong — have already enacted or proposed stablecoin rules. For now, local exchanges can list stablecoins like USDT and USDC, but without a regulatory backstop, the legal status of those listings remains ambiguous.
The FSC is expected to release its July tokenized securities framework before the National Assembly's summer recess. That document will likely clarify whether stablecoins will be folded into the new securities regime or left to the BOK — or whether the standoff continues.
