Tokenization in Korea — Part 1: Principles for Land and Shares

“Money is coined liberty, and so it is ten times dearer to the man who is deprived of freedom.”
— Fyodor Dostoevsky, The House of the Dead

Dostoevsky linked money to liberty because a transferable claim lets a person move value without asking leave of a gatekeeper. Tokenization in Korea raises a quieter version of the same idea: a digital unit that moves quickly against a legal system built for paper, registers, and intermediaries.

Existing analog systems

Korean company law remains the Commercial Act. Companies issue shares. The Act sets out how shareholders’ meetings are held, how directors are appointed, and how the company is managed. Share ownership, transfer, and the relationship among shareholders are corporate-law questions.

Korean property law remains the Civil Act. Land and other real property are held under civil-law rights. Title, co-ownership, and transfers of real rights are property-law questions. Transfers of land ownership generally require registration under the real-estate registration system. The register is the public record of who holds what.

Those two regimes are the analog baseline. They still define who owns a share and who owns a parcel of land. A later digital layer does not, by itself, rewrite either statute.

Since the blockchain arrived

A ledger is simply a list of who holds what, kept over time. Banks keep ledgers of account balances. Companies keep ledgers of shareholders. Land offices keep ledgers of registered owners. The idea is older than computers: a durable record of rights and claims.

A blockchain is a particular kind of shared digital ledger. Copies are held by many computers rather than by one central bookkeeper alone. New entries are added in linked batches, or blocks, so earlier entries are hard to alter without leaving a visible trail.

A token is a digital unit recorded on such a ledger. It can represent a claim, a membership interest, or another defined package of rights. “Tokenization” means taking an existing interest—or a claim linked to one—and expressing it as transferable tokens on a blockchain. The token is the wrapper that moves. What it wraps still has to be named in ordinary legal terms.

None of this invents Korean company law or Korean property law. It supplies a new way to record and transfer evidence of interests those laws already describe—or of claims built on top of them.

Current tension

Traditional finance (TradFi) still runs on bank accounts, forms, licensed intermediaries, company registers, and land registers. Settlement often means updating several systems that do not talk to one another in real time. Custody, clearing, and registration remain separate crafts.

Blockchain tokenization aims at a different shape of market: interests as tokens, transfers on a shared ledger, and settlement closer to the moment of trade. The promise is speed and shared visibility. The friction is that Korean legal title for shares and land still lives in the older systems.

An extra layer comes from how artificial intelligence is built. AI systems are not designed to walk into a bank branch, fill paper forms, or navigate traditional paperwork workflows. They are designed to operate on digital rails—structured data, APIs, and, increasingly, blockchain-native records. That is a practical observation about system design, not a claim that Korean law has rewritten itself for machines.

TradFi and tokenization therefore pull in opposite directions. One preserves familiar controls and proven registries. The other pushes toward records that software can read and update continuously. Korean practice sits between those poles.

How the two currently interact

Under Korean practice as of September 2026, the primary right still derives from existing private law. Company shares are Commercial Act rights. Land and other real property are Civil Act rights. Capital-markets rules may add a securities overlay. The token does not displace those sources. It sits on top of them.

In the usual Korean structure, a trustee or custodian sits in between. The regulated holder takes custody of the shares—or of the property interest that supports the offering—inside trust law, capital-markets licensing, electronic-securities rules, or a combination of them. Tokens are issued as a digital representation of the investor’s claim in that arrangement.

A change in a wallet balance does not, by itself, rewrite the company shareholder register or the land register. Investors typically receive a claim designed to track the underlying interest: a trust-beneficiary right, an investment-contract security, or another instrument Korean practice already recognizes. The token is the transferable wrapper. The custodian or trustee is the bridge to the asset.

For equity, the Commercial Act continues to answer who is a shareholder of record. In the first phase of Korea’s tokenized-securities roadmap, unlisted stocks are expected through a trust structure rather than by treating the token as a freestanding commercial-law share. Shares settle into a trust; the trustee holds them; investors hold tokens that evidence beneficial interests linked to that holding.

Owning a share under the Commercial Act carries voting rights and related shareholder rights. The shareholder of record may attend meetings, vote on corporate matters, and exercise the other powers the Act attaches to the share.

Under current Korean practice, a trustee or custodian is typically the legal shareholder of record, and investors hold tokens. The company continues to see the trustee or custodian on the shareholder register. Token holders do not appear as Commercial Act shareholders unless the structure and applicable law provide otherwise. Korean statute does not, by itself, equate a wallet balance with a vote at the shareholders’ meeting.

Voting is therefore dealt with by documentation and process rather than by ledger entry alone. The trust deed, custody arrangement, or securities terms commonly provide that the trustee votes—or abstains—according to instructions from token holders, or from a calculation agent or platform acting for them, often on a pass-through or beneficial-interest basis.

Where instructions are not received, voting may be pooled or exercised by the trustee under a stated policy set out in those same documents. The mechanics vary by product, but the pattern is contractual: the legal owner casts the Commercial Act vote; the token layer supplies the instruction path, a default rule, or both.

Token terms may give holders contractual rights to direct how votes are cast. They may instead confer economic-only rights with limited or no voting pass-through. Both are design choices in current practice and should be stated clearly in the offering documents. Holding a token does not automatically create a statutory voting right against the company.

For land, the Civil Act and the real-estate registration system remain decisive. Ownership of Korean land is not transferred by updating a private database. Fractional real-estate products have generally taken the form of securities representing interests in a structure that holds property—commonly trust beneficiary certificates or investment-contract securities—rather than splintering registered title into thousands of on-chain co-owners.

The fit is somewhat uneasy by design. Legal title stays where statute expects it. Economic and beneficiary interests move in digital form. Regulators can supervise the trustee, the securities firm, and the trading venue. Courts can locate the legal relationship without inventing a new species of title.

That is the current state of affairs in Korean practice. Technology moves the evidence and, over time, the transfer mechanics. Statute continues to define what is held. Part 2 turns to the current Korean framework and a light U.S. comparison. Part 3 examines longer-term Commercial Act and Civil Act reform for more native tokenization.