South Korea to Tax Tokenized Stocks as Securities, Not Crypto

South Korea's tax authorities view tokenized stocks as securities, not virtual assets, a position that could bring the sector under existing capital gains rules without new legislation.

The Ministry of Economy and Finance told local outlet Bloomberg Bit that if the Financial Services Commission formally classifies tokenized shares as securities, taxation would start immediately under the Capital Markets Act. Officials said the economic characteristics of tokenized equities mirror traditional securities, even if the issuance uses blockchain technology.

The ministry pointed to the FSC's 2023 token securities guidelines, which stated that assets meeting the definition of a security fall under the Capital Markets Act regardless of the technology used. Those guidelines focused on fractional ownership of real estate, art, and intellectual property, leaving tokenized ordinary shares in a gray area. Many market participants had assumed tokenized stocks would be treated like virtual assets and escape taxation until South Korea's virtual asset tax regime begins next year.

The FSC is expected to release revised token securities guidelines in July. During a May public-private task force meeting, the commission said it would develop a roadmap for tokenizing conventional securities, including listed stocks. A formal classification could clear the way for tax collection in the second half of 2026.

The ministry said taxation would not be limited to domestically issued products. Securities taxation under existing law is based on the economic rights attached to an asset, not where it is issued. Tokenized stock transactions on overseas platforms could still face South Korean tax rules if the underlying rights are deemed equivalent to securities.

Future classifications may depend on specific token features. Depending on whether voting rights are included, tokenized stocks could be categorized as ordinary shares, derivative-linked securities, or investment contract securities, the ministry noted.

South Korea's tax authorities and the National Tax Service are strengthening information-sharing arrangements with foreign tax agencies, including the U.S. Internal Revenue Service, to improve visibility into transactions on overseas platforms.

The tokenized stock market reached $1.47 billion as of June 8, up 115% since the start of the year, according to RWA.xyz. Demand has been strong for exposure to U.S. companies like Nvidia and Tesla through platforms offering 24/7 trading and faster settlement. A Binance Research report called tokenized stocks the fastest-growing segment of the real-world asset sector, with market value rising 422% since early 2025.

Growing activity on platforms such as xStocks and Ondo Global Markets has accelerated investor interest, increasing pressure on regulators to clarify how existing financial and tax laws apply. The FSC's revised guidelines are expected in July.