Blockchain-based real-world asset tokens seen as the next frontier in finance, as lawmakers prepare legal framework for 2026 launch. (Image created by ChatGPT)
SEOUL, May 2 (Korea Bizwire) — South Korea’s financial industry is accelerating efforts to tokenize traditional assets such as stocks, deposits, and loans, positioning blockchain-backed digital certificates as a cornerstone of the sector’s next phase of innovation.
According to a recent report by the Korea Institute of Finance, the global transaction volume of real-world asset (RWA) tokens reached $19.92 billion (approximately 28.4 trillion won) as of March 2025 — a sharp indication that tokenization is becoming a mainstream financial tool rather than a niche application.
Unlike the commonly known token securities associated with collectibles like art or music royalties, RWAs encompass a broader class of tokenized traditional assets, including bonds, commercial paper, money market funds, real estate investment trusts (REITs), physical real estate, precious metals, and even fine art. These tokens utilize blockchain technology to enhance transaction security, efficiency, and transparency.
“Tokenized financial assets promise faster, more cost-effective transactions while reducing the need for intermediaries,” the institute noted, highlighting how programmable digital certificates can enable automated trading without central clearinghouses, thereby lowering transaction fees.
However, the report also warned of emerging risks. Discrepancies between tokens and their underlying reference assets — such as mismatched pricing or settlement timelines — could destabilize markets. Moreover, real-time settlement using blockchain could pressure financial institutions to maintain large cash reserves to mitigate liquidity risks, particularly during periods of high transaction volume.
Despite these challenges, the institute urged financial institutions and infrastructure providers to proactively embrace tokenization, calling it a “crucial agenda item” for boosting market competitiveness and streamlining operations.
Non-financial businesses, which may find the concept of financial tokenization complex, should be supported with clear information and risk guidance to encourage broader participation, the report added.
In South Korea, tokenization of real-world assets still lacks a formal legal foundation. The country’s first legislative attempt to legalize the practice — via amendments to the Capital Markets Act and the Electronic Securities Act — is expected to pass the National Assembly following the presidential election later this year, potentially setting the stage for a fully regulated tokenized asset ecosystem in 2026.
Ashley Song (ashley@koreabizwire.com)
