South Korea’s Financial Services Commission (FSC) has outlined a three-phase plan to build the legal and technical foundation for issuing tokenized securities covering assets such as stocks, bonds, and funds. The roadmap is designed to bring tokenization into the country’s existing capital markets framework rather than treating it as a separate, unregulated activity.

In a press release published Friday, the FSC said tokenized securities will gain formal legal recognition as digitized forms of securities once an update to the Act on Electronic Registration of Stocks and Bonds takes effect on Feb. 4, 2027. The implementation schedule is closely tied to a broader roll-out of amended capital markets and electronic securities laws.

Key takeaways

• Legal status begins Feb. 4, 2027, when an amendment to the Act on Electronic Registration of Stocks and Bonds takes effect for tokenized securities.
• Phase 1 (from recognition) covers institutional money market funds, bonds, unlisted stocks, and fractional investment securities.
• Phase 2 broadens scope by extending tokenization to all publicly offered securities.
• Phase 3 targets onchain settlement by pursuing onchain payments linked to stablecoins.
• The FSC will coordinate with the Korea Securities Depository (KSD) to build the necessary tokenization infrastructure.

What South Korea’s FSC is changing in 2027

The FSC’s roadmap hinges on a legal shift: tokenized securities will be treated as digitized versions of traditional securities under South Korea’s electronic registration framework. According to the FSC, the change is expected to take effect on Feb. 4, 2027, after the relevant statutory update becomes operational.

Once this happens, tokenized instruments will not merely be “technology-layered securities.” Instead, they will be recognized within the legal system governing stock and bond registration—an important distinction for issuers, investors, and intermediaries who need clarity on rights, governance, and compliance.

For market participants, legal recognition is often the prerequisite for scalable issuance and broader participation. Without it, tokenized products typically face uncertainty around transferability, custody, and the enforcement of investor protections. The FSC’s plan aims to close those gaps by integrating tokenized securities into the capital markets regime.

Phase 1: recognition for a limited set of products

In the first stage, the FSC said tokenized securities will receive legal recognition across several categories, including institutional money market funds, bonds, unlisted stocks, and fractional investment securities. This sequencing matters because it starts with markets where regulators can more directly define operational boundaries while the infrastructure and oversight processes are still being established.

The FSC also tied the roadmap to the planned implementation of two legislative components: an amended Capital Markets Act and an Electronic Securities Act, which together form what the FSC describes as the country’s first tokenized securities framework. Earlier in the process, the FSC had indicated it was preparing detailed tokenized securities rules aimed at bringing tokenized securities under South Korea’s capital markets framework in 2027, an approach noted in earlier reporting (see Cointelegraph coverage of the regulator’s May statements).

The practical question for Phase 1 participants will be how tokenization is handled end-to-end—issuance, registration, transfers, and custody—especially for instruments like fractional investment securities where the unit of ownership may differ from legacy models.

Phase 2 and Phase 3: expanding issuance and testing new payment rails

Phase two of the FSC roadmap is set to expand tokenization to all publicly offered securities. This is a significant step up from the Phase 1 list because it implies broader availability of tokenized products to retail and institutional participants under the same umbrella rules.

However, the FSC did not assign a specific public date for the transition to Phase 2 in the press release. Instead, it said it will determine the timing after submitting and refining subordinate regulations.

The third phase introduces an additional technological ambition: onchain payments linked to stablecoins. In other words, the FSC is not only aiming to tokenize the asset layer (securities issuance and ownership records), but also to modernize parts of the settlement process. Stablecoins are referenced here as the linkage for onchain payment settlement, reflecting the regulator’s attempt to align tokenized securities workflows with digital payment mechanisms.

That said, major implementation details—such as which stablecoin frameworks (if any) would be considered, how payment flows would be controlled, and what oversight would apply—are not specified in the release. Market watchers will likely focus on the subordinate rule revisions that the FSC plans to propose after consultation with relevant stakeholders.

Regulatory coordination and what investors should monitor next

The FSC said it will work with the Korea Securities Depository (KSD) to develop the necessary tokenization infrastructure before the roadmap’s initiation. That coordination is a practical signal: tokenized securities can only scale if the core market plumbing—especially registration and transfer processes—is adapted to handle tokenized formats reliably.

Following the roadmap announcement, the FSC also indicated it plans to propose revisions to relevant subordinate regulations by the end of September and then decide the timeline for phases two and three. For investors and platform builders, that regulatory and technical rulemaking period is likely to be the most consequential window for understanding how compliance will work in practice.

It’s also worth placing the roadmap in the context of South Korea’s wider regulatory movement around tokenized assets. In May, the FSC said it would release detailed tokenized securities rules in 2027 to bring tokenized securities under the capital markets framework, according to earlier coverage (see Cointelegraph). Separately, in April, South Korea’s Ministry of Economy and Finance announced a pilot project involving tokenized deposits to execute government operational spending, with a full rollout targeted for the fourth quarter of 2026 (see Cointelegraph).

Taken together, the developments point to a regulator that is treating tokenization as a structured modernization of finance—starting with legal recognition, then expanding product coverage, and finally testing settlement innovations that could connect onchain activity with regulated payment processes.

For now, the key watchpoints are the end-of-September subordinate regulation revisions, the precise operational requirements that will govern tokenization infrastructure with KSD, and how Phase 3 will handle stablecoin-linked onchain payments in a way that preserves investor protections and settlement finality.

The National Sheriffs’ Association (NSA) has withdrawn its earlier opposition to the Digital Asset Market Clarity (CLARITY) Act, saying in a Thursday letter that its stance is now “neutral.” The development comes ahead of a potential Senate vote later this month when Congress returns to session.

In the letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, the NSA pointed to the complexity of the legislative process and the “significant work undertaken” by lawmakers, the Administration, and stakeholders to address “legal, regulatory, and enforcement considerations” tied to the bill. NSA leadership said the group believes it is more constructive to let the legislative process continue as Congress seeks to build a clearer regulatory structure for digital assets.

Key takeaways

• The NSA has changed its position on the CLARITY Act from opposition to “neutral,” signaling less resistance to the bill’s advancement.
• The association’s earlier concern centered on amendments that would exempt crypto mixers from multiple registration requirements.
• House passage in July 2025 has been followed by multiple Senate hurdles, including committee progress and continued debate among lawmakers and stakeholders.
• Senate leaders have taken procedural steps toward a vote, with Thune filing a motion to hold cloture after senators return.

NSA shifts from opposition to neutrality

The NSA’s updated position was articulated by NSA president Troy Wellman alongside CEO and executive director Justin Smith. They said the association is no longer pushing against the measure at this stage, arguing that the most appropriate path is to “step back” and allow Congress to proceed to establish “a clear, effective, and much needed regulatory framework.”

This change represents a notable recalibration from the NSA’s earlier messaging. Previously, the group had expressed “significant concerns” about specific CLARITY provisions—particularly amendments involving crypto mixers and how they could affect registration obligations.

What the NSA previously objected to: crypto mixer exemptions

According to the NSA’s earlier letter, the association’s opposition was driven by provisions it believed could limit law enforcement tools used to trace illicit activity and recover victims’ funds. In that prior stance, the NSA argued that exempting crypto mixers from many registration requirements could “[impair] law enforcement’s ability to trace transactions and digital assets, and recover victims’ money.”

In July, Sheriff Jim Skinner—speaking in a video posted by the NSA—also criticized the framing of the bill, stating, “The CLARITY Act protects the crypto industry, not the public.” Earlier coverage and the Senate Banking Committee correspondence cited by the NSA indicate that mixer-related language was at the heart of the dispute.

While the Thursday letter does not detail which provisions have been addressed or how the group views the bill’s current draft, the shift to neutrality suggests the NSA is at least willing to allow continued consideration rather than maintain active resistance.

CLARITY’s path through Congress remains contested

The CLARITY Act passed the US House of Representatives in July 2025 and has encountered obstacles since being sent to the Senate. While Senate committees—including the agriculture and banking committees—passed versions of the bill in 2026, the measure has continued to face pushback and uncertainty from multiple groups and lawmakers.

Debates described around the legislation have reportedly included issues beyond enforcement logistics, such as stablecoin-related rewards, tokenized equities, and concerns about potential conflicts of interest involving President Donald Trump and his family. These sticking points have kept the bill from reaching a final, unified Senate outcome even after committee progress.

As Congress nears its return to session, procedural moves have also signaled an effort to bring the bill to the floor. Before going on break, Thune reportedly filed a motion to hold a cloture vote on the measure on Sept. 15 once senators return from state work periods—an action that typically aims to limit extended debate and move legislation forward.

Regulators signal they could act even without legislation

Even as CLARITY awaits a Senate path to final passage, US regulators have indicated that crypto oversight may not wait indefinitely for congressional action. Earlier reporting noted that Trump publicly pushed for passage alongside the heads of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as representatives from digital asset companies.

According to earlier coverage, SEC Chair Paul Atkins and CFTC Chair Michael Selig—both nominated by Trump—have signaled that their agencies would continue efforts to address crypto regulation if Congress is unable to pass a market structure bill.

This matters for market participants because it reframes timing and certainty. A shift in the NSA’s position reduces one vocal source of resistance, but it does not remove other policy debates reportedly surrounding stablecoin rewards, tokenized assets, and broader governance concerns. Meanwhile, regulator willingness to proceed without CLARITY could mean the industry faces parallel developments: legislative negotiations in the Senate alongside rulemaking and enforcement direction from the agencies.

As the Senate calendar firms up, readers should watch whether the bill’s most contested provisions—particularly those tied to enforcement and registration—change between committee language and the final text heading to a vote, and whether additional stakeholders follow the NSA’s example by shifting their stance ahead of the chamber’s next steps.

QuFi Network says it has launched a post-quantum verification platform aimed at protecting digital assets from future quantum-computing threats—without forcing existing blockchain settlement layers to undergo immediate upgrades. The core idea is to add a separate verification step that can use post-quantum cryptography while leaving the underlying networks to continue settling transactions in their current forms.

Alongside the platform, QuFi introduced uBTC, a proof-of-concept applying the verification approach to Bitcoin. In the implementation described by QuFi, uBTC runs on Bitcoin Testnet, verifies BTC collateral, and produces cryptographic proofs that govern how value moves between settlement environments, with final redemptions settling as standard Bitcoin transactions.

Key takeaways

• QuFi’s platform separates transaction verification from on-chain settlement, using a dedicated network of nodes for post-quantum checks.
• The uBTC proof-of-concept applies the verification layer to Bitcoin Testnet while keeping ultimate redemptions compatible with normal Bitcoin transaction settlement.
• QuFi reports using three post-quantum cryptographic standards—ML-DSA-65, SLH-DSA, and ML-KEM-1024—for signatures and key exchange.
• The announcement adds to a broader push across the ecosystem to prepare for quantum risks through methods that avoid immediate hard forks or chain-wide rewrites.

A verification layer built to avoid chain migrations

According to QuFi, the platform is designed to reduce some of the practical friction that can come with adopting post-quantum cryptography directly at the blockchain protocol level. QuFi’s stated motivation is that larger post-quantum signatures and related cryptographic operations can increase storage, bandwidth, and computation requirements when deployed inside individual blockchains.

Instead of changing how settlement networks validate transactions at the base layer, QuFi says it “separates verification from settlement.” The company describes a decentralized set of verification nodes that validates transactions using post-quantum cryptography before those transactions are settled on existing blockchain networks. For users and integrators, the practical implication is that post-quantum protections could be introduced as an additional infrastructure component rather than as a sudden protocol overhaul.

QuFi also positioned the platform around a concrete cryptographic toolbox: ML-DSA-65 and SLH-DSA for digital signatures, and ML-KEM-1024 for secure key exchange. The use of multiple standards suggests QuFi is aiming for flexibility in how verification and key establishment work across different flows, though the performance and operational trade-offs of each element are not detailed in the announcement.

uBTC: post-quantum checks for Bitcoin collateral (test environment)

QuFi’s uBTC system is a proof-of-concept that takes the verification approach and tests it against Bitcoin’s asset layer. The described design is relatively specific: uBTC verifies BTC collateral and generates cryptographic proofs that define how value can move between settlement environments. Redemptions, QuFi says, ultimately settle as standard Bitcoin transactions.

Operating on Bitcoin Testnet4 means the work is currently in a test stage rather than live production settlement. For investors and builders, the key reason to watch this kind of design is that it targets compatibility—by generating proofs for movement rules, rather than requiring Bitcoin itself to immediately adopt a new post-quantum signature scheme. However, the real-world effectiveness will depend on how the proof system behaves under realistic load, how verification nodes are governed and secured, and whether the proof workflow can be made robust for everyday wallet and custody operations.

Quantum defenses are spreading—sometimes with clear trade-offs

QuFi’s announcement lands in the middle of a wider industry campaign to harden blockchains against quantum-era threats. Recent efforts show a pattern: many teams are trying to prepare without forcing disruptive upgrades, but each approach comes with costs.

Earlier in August, StarkWare tested a quantum-resistant Bitcoin transaction on mainnet without requiring a fork. According to reporting from Cointelegraph, the experiment ran for hours, cost roughly $150 to $200, and produced a nonstandard transaction format that required direct submission to a miner. That experience illustrates one of the practical barriers to immediate post-quantum adoption at the settlement-layer level: even when a scheme works, it can be expensive and operationally awkward.

The same month, a pilot involving banks and regulators across Europe, the Middle East, and Asia tested post-quantum wallets and onchain transfers using ML-DSA-65, a standard that QuFi also lists among its cryptographic choices. In parallel, the Ethereum Foundation reportedly removed the Poseidon hash function from its planned post-quantum architecture in favor of established alternatives such as SHA or BLAKE. Together, those moves underline how the search for “quantum readiness” is not just about adding new cryptography, but also about selecting components that are mature, implementable, and safe under realistic engineering constraints.

Bitcoin developers have also been exploring protocol-level mechanisms. Cointelegraph previously covered work from Blockstream researchers around a Bitcoin Improvement Proposal for SHRINCS, an experimental post-quantum signature scheme intended to reduce the size and performance costs of quantum-resistant signatures. The same coverage highlighted important trade-offs: SHRINCS uses stateful signatures to keep signatures smaller, which requires wallets to track previously used signing keys. It also remains in an early stage without a completed security proof and introduces complexity that could create user failure modes.

Why QuFi’s approach matters—and what to watch next

The main difference in QuFi’s pitch is architectural. By placing post-quantum verification in an external layer and keeping settlement tied to existing blockchain networks, QuFi is aiming to avoid the immediate overheads and interoperability friction that can arise when chains are forced to adopt larger post-quantum primitives all at once.

That said, a verification layer introduces its own questions that the market will likely evaluate over time: how decentralized and credible the verification network is, how proofs are generated and validated end-to-end, and whether operational requirements for key management and custody remain manageable. For Bitcoin-related use cases, particular attention will be on how uBTC’s testnet results translate to real wallet and exchange integration patterns—especially if the goal is to support production redemptions without requiring nonstandard transaction formats or special miner submission paths.

Readers should watch for updates that move beyond testnet demonstrations—particularly performance metrics, security assumptions for the verification network, and any clarity on how this approach could interoperate with broader custody, compliance, and wallet tooling as quantum transition planning accelerates across the ecosystem.