Korea Passes STO Legislation, Fueling Expectations for Tokenized Securities Market Growth

South Korea has taken a major step toward institutionalizing Security Token Offerings (STOs), as the National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act. STOs use blockchain technology to issue and trade tokenized forms of traditional securities and real-world assets, enabling fractional ownership of assets such as real estate, infrastructure, artwork, and even intellectual property like music copyrights and content IP.

The revised Electronic Securities Act is expected to clarify the legal definition of distributed ledgers and expand the scope of assets eligible for regulated trading, including investment contract securities that were previously difficult to circulate within formal markets. Industry participants anticipate that stronger legal foundations could accelerate market growth, with some forecasts suggesting Korea’s STO market may reach hundreds of trillions of won by 2030.

However, tokenized securities remain classified as “securities” under the Capital Markets Act, meaning the same disclosure and filing obligations apply, including registration statements and ongoing reporting requirements. Brokerage activities will require proper licensing as an investment intermediary, and regulators plan to form a public-private consultative body involving the Financial Services Commission, Financial Supervisory Service, Korea Securities Depository, and other key stakeholders. Analysts also highlight that further developments—such as integration with stablecoins or CBDCs—could significantly improve capital and settlement efficiency in the tokenized economy.

Read more: South Korea Sets 5% Cap for Corporate Crypto Investment Under FSC Guidelines

Related reading: Korea’s Digital Asset Basic Act Delayed: How Stablecoin and STO Tracks Are Moving Separately — How the DABA delay affects the STO timeline and stablecoin regulation.