A South Korean lawmaker has introduced a comprehensive bill aimed at establishing a more structured regulatory environment for crypto assets in the country. The proposed legislation, known as the Digital Asset Basic Act, was announced Tuesday by Min Byeong-deok, a member of the ruling Democratic Party.

The bill is designed to complement the Virtual Asset Investor Protection Act, which took effect in July 2024, by going beyond investor safeguards to define a broader legal foundation for digital asset activity.

Aligning with Global Stablecoin Trends

At a press conference, Min described the bill as a step toward positioning South Korea as a global leader in the digital economy. A key feature of the legislation is the implementation of a licensing system for stablecoin issuers.

Under the proposed rules, stablecoin operators would be required to hold a minimum of 500 million Korean won (approximately $367,890) in owner’s capital to qualify for a license. This requirement is intended to ensure financial accountability and support the government’s broader goal of promoting Korean won-denominated stablecoins.

The stablecoin licensing provision appears to support the administration’s broader policy agenda under President Lee Jae-myung, who previously committed to enabling a domestic stablecoin market.

Min, who led the digital asset committee during President Lee’s election campaign, indicated that the measure aims to curb capital flight through foreign-currency-based stablecoins and support a robust local digital financial system.

The legislative push follows similar developments in other jurisdictions. In the United States, the Genius Act, which addresses stablecoin regulation, is gaining traction with support from President Donald Trump. Meanwhile, Hong Kong recently enacted its own licensing framework for stablecoin issuers.

These international examples appear to inform South Korea’s approach, as Min highlighted parallels with regulatory practices in the US, European Union, and Japan,particularly regarding the issuance, distribution, and trading of digital assets.

Establishing Broader Oversight of Digital Assets

Beyond stablecoins, the Digital Asset Basic Act seeks to provide legal clarity on digital asset classifications and the responsibilities of service providers operating within the ecosystem.

The bill includes provisions for the creation of a Digital Asset Committee to be directly overseen by the Office of the President, emphasizing a centralized oversight mechanism.

In addition to structural reforms, the proposed legislation outlines legal frameworks to address market misconduct. These include penalties for unfair trading practices such as price manipulation or the dissemination of false information, areas not directly addressed by prior laws.

The bill also includes measures to standardize compliance procedures for exchanges and custodians operating in the country. If enacted, the Digital Asset Basic Act would mark a significant step in the evolution of South Korea’s crypto regulatory space.

As jurisdictions around the world continue to develop their approaches to digital finance, South Korea’s proposed framework positions it among the countries seeking to balance innovation with oversight. The bill is expected to undergo further review and discussion in the National Assembly in the coming months.

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