South Korea is poised to significantly expand its cryptocurrency regulatory landscape with the introduction of a new bill, the “Digital Asset Basic Act,” unveiled today by Min Byeong-deok, a lawmaker from the ruling Democratic Party. The proposed legislation aims to establish a comprehensive framework for the digital asset ecosystem, building upon the existing Virtual Asset Investor Protection Act, which came into effect in July 2024.
Speaking at a press conference, Min Byeong-deok asserted that the Digital Asset Basic Act would serve as a cornerstone for South Korea’s leadership in the global digital economy. While the previous act primarily focused on investor protection, this new bill seeks to provide a more structured and extensive regulatory environment for digital assets.
A key provision of the new bill is the implementation of a licensing regime for stablecoin issuers. This would require stablecoin issuers to maintain owner’s capital exceeding 500 million Korean won (approximately $367,890). This measure directly aligns with recently elected President Lee Jae-myung’s campaign promise to foster a Korean won-based stablecoin market and prevent capital outflow through foreign-denominated stablecoins. Min Byeong-deok notably served as the head of the digital asset committee during President Lee’s election campaign.
The move comes as stablecoin regulations gain momentum globally, with similar initiatives seen in the United States and Hong Kong. The U.S. has been working on the Genius Act, while Hong Kong has already passed a stablecoin bill mandating licensing for issuers. Min cited these examples, along with regulations in the EU and Japan, highlighting how their frameworks encompass a broader set of rules for the issuance, circulation, and trading of crypto assets.
Beyond stablecoins, the Digital Asset Basic Act proposes to legally define digital assets and their application to service providers. It also calls for the creation of a Digital Asset Committee, to be directly overseen by the President. Furthermore, the bill seeks to establish a legal basis for penalizing unfair practices within the crypto market, aiming to enhance market integrity and consumer confidence.