South Korea’s ruling Democratic Party has unveiled a major bill that would impose bank-style rules on stablecoins and create a comprehensive legal framework for the country’s digital-asset industry.
The proposed “Digital Asset Basic Act,” introduced Wednesday, aims to regulate issuance, trading, custody and supervision of digital assets. The draft explicitly creates a new category for “value-linked digital assets” — tokens tied to fiat currencies or real-world assets — and says issuers of those instruments would need formal authorization, dedicated refund reserves and clear redemption obligations.
Why it matters: the measure would impose licensing, registration and ongoing reporting requirements across the crypto value chain — covering exchanges, brokerages, custodians and advisory services — and mandate capital thresholds, operational capacity and reserve plans for anyone approved to issue such tokens. It also introduces rules on disclosures, internal controls and market conduct, with explicit bans on manipulation and trading on non-public information.
The proposal comes against a backdrop of months-long disagreement among regulators over who should be allowed to issue won-pegged stablecoins. Earlier this year talks stalled after the Bank of Korea argued that only banks with at least 51% domestic ownership should be permitted to issue such coins, while the Financial Services Commission warned a bank-only approach could stifle innovation. The new bill appears aimed at resolving that debate by setting authorization and prudential standards for issuers.
Institutional governance is also a focus: the law would create a digital asset committee to coordinate policy, and require national-level basic and implementation plans for the sector. Lawmakers say the goal is to “establish a foundation for Korea to lead the global digital financial order,” reflecting an ambition to pair strong investor protections with clearer rules for market structure and issuance — areas they say current regulation leaves thin.
The announcement coincides with immediate regulatory action: on Wednesday the Financial Services Commission and Financial Supervisory Service ordered all domestic crypto exchanges to adopt a standardized, stricter system for delaying withdrawals — a move intended to blunt a wave of voice‑phishing scams that exploit transaction speed.
Next steps: the Democratic Party’s bill now faces the parliamentary process and further regulatory debate. If adopted, it would mark a significant tightening and formalization of Korea’s crypto rulebook, with particular implications for stablecoin issuance and the balance between bank participation and private-sector innovation.
Read more AI-generated news on: undefined/news
