Tokenization, Crypto, AI and Connected Payment Systems: Digital Assets Thoughts of the Week

South Korea and tokenization

“Proposed rules would allow stocks, bonds, and investment funds to operate under the country’s tokenized securities framework when it comes into effect in 2027.

“The framework includes requirements covering capital, compliance personnel, technology systems and the management of distributed ledger records. Proposed rules for retail OTC markets would also impose annual purchase limits for individual investors.

“South Korea’s proposed framework would require distributed ledgers to operate with designated account managers and involvement from the Korea Securities Depository.
The important question is which record determines legal ownership when systems disagree, and who is responsible for correcting it. Institutions need that answer before they can rely on tokenized securities at scale.

“As more established securities move onto distributed ledgers, the legal status of the ownership record becomes just as important as the technology maintaining it. Investors and issuers need to know what the record represents, who is accountable for it and how disputes or discrepancies are resolved.

“For institutions, that level of legal certainty will be central to whether these assets can be issued, distributed and held at scale.”