South Korea’s Democratic Social gathering advances Digital Asset Fundamental Act to control crypto
South Korea’s Democratic Social gathering has formally proposed the Digital Asset Fundamental Act, introducing a stablecoin licensing regime and expanded oversight beneath President Lee Jae-myung’s administration.
Throughout a June 10 press convention, lawmaker Min Byeong-deok introduced the invoice’s submission, calling it a foundational step towards complete regulation of digital property, together with stablecoins, cryptocurrencies, and associated service suppliers.
Min stated the laws was designed to reinforce transparency and investor safety whereas positioning South Korea as a world chief within the digital economic system.
The Digital Asset Fundamental Act builds on the prevailing Digital Asset Investor Safety Act, which got here into impact in July 2024.
Whereas the earlier laws centered totally on safeguarding traders, the brand new proposal outlines a broader framework that defines digital property, establishes new licensing and approval techniques, and mandates oversight mechanisms beneath the Monetary Companies Fee.
A key function of the invoice is the licensing requirement for issuers of Korean won-backed stablecoins.
Notably, issuers should keep a minimal capital of ₩500 million (roughly $367,890) and acquire approval from the Monetary Companies Fee.
Moreover, they need to implement safeguards comparable to chapter remoteness and reserve administration to make sure person redemption rights even when the stablecoin issuer turns into bancrupt.
Moreover, the laws lay the groundwork for regulating all digital asset issuances and buying and selling actions. It consists of provisions to ascertain a Digital Asset Committee beneath the President’s workplace to coordinate nationwide digital asset coverage.
In the meantime, a separate entity dubbed the Digital Asset Business Affiliation could be tasked with monitoring market practices and evaluating the eligibility of tokens for alternate listings by means of devoted subcommittees.
To handle market misconduct, the invoice grants the Monetary Companies Fee investigative authority and empowers it to impose penalties for unfair buying and selling actions. It additionally introduces approval, registration, and reporting necessities for corporations working within the digital asset sector.
The introduction of the Digital Asset Fundamental Act comes simply days after President Lee Jae-myung’s inauguration on June 4. Lee, who gained the presidency with over 49% of the vote, had campaigned on a platform that included robust assist for digital asset adoption and regulatory readability.
His marketing campaign proposals included legalizing spot crypto ETFs, increasing institutional entry to digital property, and enabling the nation’s pension fund to allocate capital into crypto markets.
Min Byeong-deok, who led the celebration’s digital asset committee throughout Lee’s marketing campaign, has advocated for broader crypto regulation however has positioned explicit emphasis on the urgency of launching a home stablecoin framework to counter U.S. dollar-backed tokens like USDC and USDT.