 ▲ The Financial Services Commission building in Seoul. |
FSC launches token securities consultative body… “Reviewing payment integration with stablecoins”
“Overseas attempts at 24-hour, same-day settlement”… Institutional framework to be set within first half of the year
The Financial Services Commission (FSC) has begun full-scale work on designing the system and infrastructure for token securities. In the long term, it is also considering linking token securities with stablecoins for settlement.
On the 4th, the FSC held the first meeting of the public-private joint “Token Securities Consultative Body” at the Government Complex Seoul to discuss future operational plans and policy directions.
Token securities are digital forms of securities issued and managed using blockchain-based distributed ledger technology and are classified as securities under the Capital Markets Act. The Token Securities Institutionalization Act (amendments to the Electronic Securities Act and the Capital Markets Act), which passed the National Assembly in January, is scheduled to take effect on February 4, 2027, following the revision of subordinate regulations and the establishment of infrastructure.
In his opening remarks, FSC Chairman Kim Byoung-hwan stated, “Token securities are not a temporary trend but will become a pillar supporting the structural convergence of capital markets,” and presented three key policy directions.
First, the FSC said it would review mid- to long-term innovations in the securities settlement system in connection with discussions on institutionalizing stablecoins.
Chairman Kim explained, “In some overseas markets, attempts are being made to support 24-hour and T+0 (same-day) settlement of securities through systems that settle token securities using stablecoins,” adding, “This so-called ‘on-chain settlement,’ where securities (token securities) and payment instruments (stablecoins) are settled on the same blockchain, maximizes settlement efficiency.”
If such a settlement system is introduced, it is expected to move away from the current structure where investors can withdraw funds only two days after selling securities, enabling them to receive funds on the same day of the transaction.
He said, “We will design the token securities system and infrastructure with consideration for connectivity and future scalability with stablecoins to be introduced through upcoming discussions on the Digital Asset Act in the National Assembly.”
He also emphasized the creation of a digital innovative finance ecosystem based on diverse underlying assets.
Chairman Kim noted, “There is a growing number of securities that allow investors to invest in specific underlying assets or projects based on personal interests, such as investing in a favorite singer’s music to receive royalty distributions or investing in professional livestock farms to receive proceeds from Korean beef auctions,” adding, “We will overhaul the overall system, including issuance, distribution, and disclosure, to enable the emergence of diverse and innovative token securities.”
The FSC will also pursue improvements to the investor protection framework tailored to the characteristics of token securities.
It plans to examine whether current capital market regulations align with the structure of token securities and, rather than simply applying existing rules, to further refine and advance investor protection systems suited to their unique features.
The consultative body will operate on a standing basis, consisting of four subcommittees covering technology and infrastructure, issuance, distribution, and settlement.
A separate “Open Private Advisory Group” will also be operated to broadly gather opinions from market participants and experts.
The FSC plans to establish the direction of institutional design within the first half of this year and continue discussions on key issues until the law takes effect.
Disclaimer: This article is provided for informational purposes only and does not constitute investment advice.