South Korea Aims to Tokenize Its Securities: Is Avalanche on Track?

A three-phase roadmap for Seoul

The Financial Services Commission (FSC), South Korea's financial regulator, has unveiled its official roadmap for the digital transformation of securities issuance and circulation. The goal is clear: to migrate the country's entire capital markets infrastructure onto the blockchain.

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The plan is structured around three stages. The first will kick off in February 2027, with the entry into force of the revised Electronic Registration Act. This phase will cover private money market funds (MMF) and bonds reserved for institutional investors, unlisted stocks via a trust structure, as well as publicly offered fractional investment securities.

An excerpt from the statement by the Financial Services Commission (FSC), the South Korean financial regulator.

The second phase will expand tokenization to all publicly offered securities. The third and final step aims to establish an on-chain settlement infrastructure linked to stablecoins, allowing the entire chain, from issuance to settlement, to be processed on the blockchain.

Stocks, bonds, and funds involved

The FSC plans to include not only fractional securities (previously focused on assets like art or music royalties) but also conventional securities: stocks, bonds, and funds. The Korea Securities Depository (KSD) and brokerage firms will be required to jointly develop the necessary infrastructure.

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To protect retail investors, a net annual investment cap of 100 million won (approximately 68,000 euros) per OTC platform is planned. Issuing account management entities will be required to maintain at least 4 billion won in equity capital and adhere to strict cybersecurity requirements.

The FSC also plans to test security token trading on the Korea Exchange (KRX), drawing inspiration from pilot programs at the NYSE and Nasdaq.

Avalanche claims a central role

Shortly after the announcement, the Avalanche Foundation stated on X that South Korea is "bringing its entire capital markets infrastructure onchain, powered by Avalanche." The message points to a full connection of the value chain, from issuance to settlement and clearing.

BREAKING: South Korea is bringing its entire capital markets infrastructure onchain, powered by Avalanche

The Financial Services Commission and Korea Securities Depository are laying the groundwork to bring stocks, bonds and funds onchain, connecting the full capital markets… pic.twitter.com/JfrWxpIOO9

— Avalanche🔺 (@avax) September 4, 2026

However, the official FSC statement does not explicitly mention Avalanche. The KSD has been working for several months on technical criteria for distributed ledgers, but the final selection of one or more infrastructure blockchains has not yet been formally announced by the regulator.

The announcement has nonetheless boosted the AVAX token, which is trading around 8.03 dollars, up 11% over seven days and more than 24% over thirty days. Some in the community, however, are questioning the real impact of these institutional partnerships on the token's value, with several replies to the official tweet pointing to the lack of a direct value capture mechanism.

Accelerating institutional momentum

This announcement is part of a favorable trend for Avalanche, whose ecosystem is increasingly aligning with traditional finance. The protocol was recently selected by Charles Schwab for its crypto offering, alongside Solana and Chainlink.

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The Korean roadmap could accelerate a fundamental trend: that of real-world asset (RWA) tokenization driven not by crypto-native projects, but by regulators themselves.

Sources: FSC, The Elec, Official Avalanche X account