South Korea Approves Onchain Securities Trading; Blast L2 Shuts Down Amid Costs
South Korea announced regulatory approval for stocks, bonds, and funds to trade on blockchain starting February 2027, with infrastructure being built on Avalanche. Japan's SMBC Nikko securities firm is developing a regulated trading venue on Uniswap launching mid-2027, while Base added 26 tokenized stocks for 24/7 trading. Meanwhile, Blast Layer 2 announced its shutdown due to unsustainable operating costs exceeding revenue, requiring users to withdraw funds to Ethereum by October 26.
South Korea's regulatory green light represents a significant milestone for blockchain infrastructure in traditional finance. The country's securities depository will build its onchain connectivity using the Avalanche network, indicating a strategic choice of blockchain platform for institutional-grade trading. Meanwhile, Japan is pursuing a parallel path through SMBC Nikko's partnership with Uniswap, embedding compliance mechanisms directly into the protocol layer rather than relying on external systems. These developments suggest that major Asian financial centers are moving toward standardized frameworks for digital securities trading.
The contrasting outcomes highlight different sustainability models in the crypto ecosystem. While established financial institutions are building regulated venues with built-in compliance infrastructure, smaller Layer 2 blockchains face operational challenges. Blast's shutdown demonstrates that even venture-backed projects struggle when transaction volumes cannot cover infrastructure costs, a concern that may shape future blockchain development priorities toward either revenue-generating features or lower operational overhead.
These regulatory approvals could reshape how global securities markets function, potentially enabling round-the-clock trading and reducing settlement times. Retail and institutional investors might gain access to previously illiquid assets, though this depends heavily on adoption rates and regulatory harmonization across jurisdictions. The simultaneous failure of Blast suggests that crypto infrastructure projects face genuine economic viability questions, which could influence investor confidence in Layer 2 solutions and determine which blockchain platforms become dominant for financial applications.