[Op-Ed] The National Assembly Opened the Tokenized Securities Market—It Must Not Narrow It Again with Regulation

The National Assembly has opened the door to the token securities market. On January 15, it passed amendments to the Electronic Securities Act and the Capital Markets Act, bringing token securities—previously confined to special treatment for fractional investment—into the formal capital market system. In doing so, it established an institutional foundation for making small-scale investments in fractionalized real assets such as buildings. The law will take effect on February 4, 2027.

The size of the market depends on how the system is designed. In 2023, Hana Institute of Finance and others projected that the domestic token securities market, including real-world asset-linked products, could grow to KRW 367 trillion by 2030. The National Assembly Research Service also cited this forecast.

On the other hand, there are also projections that, under the current system and regulatory framework, the market will reach only KRW 30 trillion to KRW 60 trillion by 2030. Given that the industry currently estimates the market at around KRW 1 trillion to KRW 3 trillion, the scale of growth could vary depending on what rules are put in place.

However, the policy direction announced by the Financial Services Commission last September did not fully capture the market’s potential. In the first phase, to be permitted next February, the scope is limited to privately placed MMFs for institutional investors, privately placed corporate bonds, unlisted shares under a trust structure, and publicly offered fractional investment securities. Listed shares and publicly offered bonds were excluded, and no timeline was set for the next phase of introduction. Although the law recognizes token securities as an issuance format applicable to all securities, the Financial Services Commission chose an approach of opening the market by selectively permitting assets one by one.

The investment caps applied to retail investors also run counter to the purpose of the system. Under the Financial Services Commission’s legislative notice issued in October, ordinary investors would be subject to an annual net purchase limit of KRW 100 million per over-the-counter exchange, while professional investors would face no limit. The purpose of token securities is to expand opportunities for individuals to make small, diversified investments in high-value real assets that had previously been difficult for them to access. If a uniform ceiling is imposed regardless of investment experience or asset size, the incentive to participate in the market is weakened.

The entry structure also remains centered on existing financial companies. The Financial Services Commission did not create a new license dedicated to token securities, instead maintaining the existing licensing framework for financial investment businesses. It strictly separated issuance and distribution, and required non-financial issuers seeking to manage accounts directly to qualify as issuer account management institutions with at least KRW 4 billion in equity capital and at least four qualified professionals. While the door has ostensibly been opened to non-financial issuers, the threshold remains high for fintech startups to clear.

First, the scope of permissible assets should be shifted from a positive-list approach to negative regulation. In other words, issuance should in principle be allowed unless it is prohibited by law or poses a clear risk to investor protection. For the remaining asset classes, including listed shares and publicly offered bonds, the timetable and conditions for introduction should also be presented in advance. Only then can businesses establish medium- to long-term investment plans and prepare to enter the market.

Investment caps should be designed in a way that respects investors’ autonomous judgment. Even if safeguards are put in place for initial market stability, there is no reason to bind all ordinary investors to the same monetary limit. It would be possible to consider applying differentiated caps based on investment experience and asset size, or easing the limits after a certain period of time. Rather than restricting adults’ investment decisions by amount, the emphasis should be placed on clearly communicating risks and providing the information necessary for sound judgment.

The separation of issuance and distribution, as well as market entry requirements, also needs to be redesigned around business capability and internal controls rather than capital size. One option would be to allow limited concurrent operations for businesses equipped with adequate internal controls and disclosure systems, while imposing strict liability for violations. If small innovative firms are first required to meet high capital thresholds, competition will shrink before it even begins.

The core of investor protection lies in thorough disclosure and strong ex post accountability. In the case of real estate token securities, details such as appraisal records, vacancy rates, rental yields, collateral, and legal rights relationships should be disclosed transparently. Strict liability should be imposed for false disclosures and unfair trading. The role of the authorities is to provide investors with sufficient information to assess risks and returns, and to prevent conduct that distorts that judgment.

The National Assembly has redrawn the legal framework to broaden access to real asset investment opportunities, once limited to a small number of wealthy investors, to the general public. Subordinate regulations must now establish rules within that framework so that anyone can compete fairly. The legislative notice period is underway. In the course of gathering opinions, the Financial Services Commission should reexamine whether the permissible asset classes, investment caps, and entry requirements align with the purpose of the system. The door opened by the National Assembly must not be narrowed again by regulation.

Yeseul Son, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] 국회가 연 토큰증권 시장, 규제로 다시 좁혀선 안 돼

Author: Ye-seul Son

Date: 2026-10-26

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=1&idx=29687