South Korea is undergoing a fundamental transformation from its traditional role as a retail crypto speculation hub to a global institutional digital finance center. According to FACTBLOCK CEO Andrew Park, who previously held executive roles at JPMorgan Chase, Visa, and American Express, the conversation with global financial institutions has shifted dramatically. "A few years ago, global companies coming to Korea were mostly focused on tokens, exchanges, and market prices," Park explained. "Today, the questions are different. Global financial institutions and companies are asking about custody, tokenization, stablecoins, payment and settlement infrastructure, regulation, and how to enter the Korean market." This evolution reflects a fundamental change in how global capital perceives the region, with international projects now treating Seoul as a jurisdiction ready for enterprise deployment rather than a high-liquidity venue for retail trading.
South Korea has advanced a comprehensive digital finance program covering 3,500 listed companies and professional investors through its corporate crypto pilot program. According to reports from FACTBLOCK, the Financial Services Commission's roadmap, released in February 2025, originally planned to allow about 2,500 listed companies and approximately 1,000 corporations to open real-name bank accounts linked to crypto exchanges. The program excludes financial companies while providing controlled pilot access rather than unrestricted participation. Since 2017, Korean companies have been unable to trade virtual assets through local exchanges due to banks' refusal to provide required real-name accounts, though the restriction was not written as a direct statutory ban.
South Korea has established a legal route for tokenized securities through amendments to the Electronic Securities Act and Capital Markets Act passed on January 15, 2026. As reported by Kim & Chang, these measures were promulgated on February 3, 2026 and are scheduled to take effect on February 4, 2027. Under the amended Electronic Securities Act, distributed ledgers can serve as legally recognized records for securities issuance, with issuers following registration procedures involving the Korea Securities Depository rather than treating blockchain records as separate systems. The Capital Markets Act changes bring investment-contract securities and fractional investment products into the regulated market, with licensed intermediaries handling distribution and over-the-counter trading operating under financial authority rules.
The Bank of Korea has expanded Project Hangang Phase II to include nine banks after adding BNK Kyongnam Bank and iM Bank to the existing seven banks (KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup, IBK Industrial Bank, and BNK Busan Bank). According to FACTBLOCK, Phase II includes person-to-person transfers, biometric payment approval, and automatic conversion between ordinary deposits and deposit tokens. The central bank is also extending digital vouchers and testing programmable controls on government spending, with electric-vehicle charging infrastructure grants and public-sector operating expenses among the first public-payment uses. A separate 9.6 billion won deposit-token payment program began in July under the Korea Internet & Security Agency, connecting deposit tokens with existing payment networks. The Bank of Korea plans phase 2 trials in late 2026 for deposit tokens integrated with autonomous AI agents.
Project Hangang has demonstrated AI agent payment capabilities through LG CNS's demonstration in January 2026, where an AI agent searched for products, checked user-defined conditions, and completed payments using deposit tokens on the Bank of Korea's infrastructure. As reported by FACTBLOCK, the Bank of Korea continues studying deposit tokens as payment methods for AI-agent services and settlement money for tokenized bonds and shares. "What I am most interested in is the infrastructure required for a machine-to-machine economy, particularly an environment in which AI agents can transact and make payments autonomously," Park explained. "If an AI agent needs to pay another agent or a service, it needs a wallet and a payment method." Technical experiments surrounding the Bank of Korea's central bank initiatives have tested agentic AI models utilizing wholesale deposit tokens to execute automated, conditional transactions. With South Korea's near-ubiquitous high-speed connectivity, deep digital literacy, and aggressive investments in both Web3 infrastructure and AI development, the peninsula is uniquely positioned for this next evolution of institutional finance.
According to FACTBLOCK CEO Andrew Park, South Korea's crypto market is moving away from its long reliance on retail trading as financial institutions focus on custody, tokenization, stablecoins, settlement systems and regulatory compliance. Corporate access creates demand for regulated custody, with BitGo Korea securing VASP registration in August 2026, allowing the company to develop crypto custody and transfer services for institutions. The regulatory framework follows the U.S. Securities and Exchange Commission's position that putting financial instruments on blockchain does not remove them from securities law, with South Korea's structure placing tokenized instruments inside its existing securities system through the Korea Securities Depository's formal registration process. Park emphasizes that "institutional markets are not created by one major announcement. They emerge when less glamorous issues such as account access, custody, payments and settlements, accounting, and compliance begin to get resolved one by one." The unglamorous plumbing is being installed across multiple regulatory and policy fronts, with South Korea building institutional liquidity by solving tedious back-office realities rather than waiting for a single, sweeping digital asset law.
