The South Korea’s power party has decided to establish the country’s first integrated framework for digital assets as part of President Lee Jae-Myung’s commitment to support the cryptographic economy.
On June 10, the Democratic Party submitted Digital Asset Basic Act, a legislative proposal aimed at regulating cryptocurrencies, stablecoins and virtual asset service providers.
The bill is led by Min Byeong-Deok, a legislator of the Democratic Party and Chairman of the Party Digital Assets Committee.
Min helped shape President Lee’s cryptography agenda during the campaign and has since taken the lead by leading the push of a Won Stablecoin frame.
What is the digital basic asset?
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Digital Asset Basic Act maintains to establish the most complete legal framework in South Korea to date to regulate the digital asset ecosystem.
Based on investors centered on investors introduced within the framework of the law on the protection of virtual asset investors in 2024, this new legislation extends its regulatory scope of the existing regulatory gaps.
An cornerstone of the bill is the license regime for stablecoin issuers, in particular those who create assets fixed to the Korean Won.
Under the proposed rules, transmitters must meet a minimum capital-capital requirement of $ 500 million (around $ 368,000) and obtain approval from the Financial Services Commission (FSC), the main financial regulator of South Korea.
In addition to capital requirements, transmitters must also maintain adequate reserve assets to support user buybacks and implement bankruptcy remoteness mechanisms.
These guarantees are intended to protect holders, ensuring that the funds remain accessible even in cases where the issuing entity becomes insolvent.
The administration of Lee considers a national ecosystem of Stablecoin as a strategic priority, citing the need to maintain capital flows within the national economy.
In May, Lee had warned that without stablecoin in Linat, Korea is likely to lose the monetary influence on tokens based on a dollar such as the USDC and the USDT, which currently dominate local exchange volumes.
During the first quarter of 2025, the first five scholarships in South Korea recorded more than 57 sterling books (approximately $ 42 billion) in negotiation volume linked to the stable stables supported in US dollars, according to Central Bank data.
The leaders of the Democratic Party maintain that a regulated market in Stablecoin KRW would not only reduce dependence on tokens led abroad, but would also strengthen monetary sovereignty.
Beyond stablecoins
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The legislation also obliges the declaration obligations for all emissions of digital assets and commercial activities.
The legislation requires that all digital asset issuers and trading platforms to register with local authorities, disclose key operational data and remain in accordance with continuous controls related to market integrity, consumer protection and financial stability.
To direct the national cryptography policy from above, the bill proposes to establish a committee of digital assets within the office of the president.
The Committee would help shape the long-term strategy around blockchain growth, regulatory railings and the development of financial infrastructure.
To strengthen the surveillance of the industry, the legislation would establish a digital association of the asset industry, responsible for the screening for tokens and the supervision of exchange operations.
Two dedicated sub-committees, the Transactions’ eligibility Evaluation Committee and the Market Supervisory Committee would be responsible for examining eligibility for tokens and investigating unfair negotiation practices.
The proposal follows from month of internal preparation by the party’s digital asset committee, summoned for the first time in mid-May and chaired by the member of the National Assembly Min.
The Committee examined the gaps in the current cryptography laws of South Korea, in particular the rigid policy “One Exchange, One Bank” which created strangulation points between the commercial platforms and their banking partners.
