South Korea's Financial Services Commission announced plans to enact a Digital Asset Basic Law within the year during a work report on the 15th, aiming to establish regulatory frameworks for the digital asset industry and strengthen user protections. The legislation responds to global competition in cryptocurrency regulation, with the U.S. and other major economies nearing completion of their own crypto frameworks. The proposed law will define digital asset businesses, create fair market structures, and institutionalize stablecoin issuance and distribution, while also strengthening anti-money laundering (AML) regulations for virtual asset transactions. Two contentious issues have stalled legislative progress: the government's proposal to limit stablecoin issuance to bank-led consortiums holding over 50% equity, and proposed 15-20% equity caps on exchange major shareholders. South Korea's National Assembly has over 10 related bills pending, with Democratic Party lawmakers emphasizing the urgency of legislation to protect won currency sovereignty against dollar-based stablecoins.
Financial Services Commission Outlines Digital Asset Law Framework
The Financial Services Commission stated the Digital Asset Basic Law will contain provisions for defining digital asset industries and establishing regulatory systems, creating fair and efficient markets, and strengthening user protections. The commission specified that stablecoin issuance and distribution will be institutionalized as major countries adopt stablecoins as new payment methods. Anti-money laundering (AML) regulations will be strengthened to counter money laundering crimes using stablecoins and other virtual assets.
National Assembly Policy Committee members voiced support for urgent legislation to secure virtual asset sovereignty. Democratic Party member 민병덕 stated at a seminar on the 15th that "the U.S. is treating virtual assets beyond investment products as part of industrial policy and national strategy, so we need a won-based stablecoin to defend currency sovereignty against dollar stablecoins." Democratic Party member 박민규 remarked that "to protect won sovereignty amid global hegemonic competition, we must swiftly advance Digital Asset Basic Law legislation," adding that "with detailed institutional design reflecting market opinions, we can sufficiently lead the global market."
Stablecoin Issuer Requirements and Exchange Equity Limits Remain Contentious
The government is reviewing a plan to initially permit bank-led consortiums holding a majority stake (50%+1) as stablecoin issuers to ensure early market stability and credibility. For exchanges, the government has proposed limiting major shareholder equity ratios to 15-20% or below, considering their role as financial infrastructure.
The industry expressed concerns that bank-centered issuance structures could hinder general corporate market entry and industrial innovation. The industry also opposes exchange major shareholder equity limits, arguing they could weaken private-sector-led industrial competitiveness. The National Assembly Legislative Research Service previously stated that exchange major shareholder equity limits could violate property rights, freedom of corporate activity, and freedom of occupation, potentially raising constitutional disputes.
Financial Industry Prepares for Digital Asset Integration Amid Regulatory Uncertainty
Domestic financial institutions have begun groundwork to build next-generation financial ecosystems based on virtual assets beyond traditional finance. Banks, securities firms, and virtual asset operators are pursuing strategic alliances and investments, identifying stablecoins, security token offerings (STOs), and real-world assets (RWAs) as new growth engines. However, the lack of legal infrastructure supporting the virtual asset industry prevents full-scale acceleration of new business investments and service expansion. The currently enforced Virtual Asset User Protection Act remains at the first-stage regulation level, focusing on unfair trading prevention and user protection.
The industry has expressed that the current regulatory vacuum increases business uncertainty and constrains investment attraction and global collaboration. With major countries like the U.S. nearing completion of legislation to incorporate virtual assets into mainstream finance, delays in institutionalization could weaken domestic industrial competitiveness and trigger investor outflows.
FAQ
What did South Korea's Financial Services Commission announce on the 15th?
The Financial Services Commission announced plans to prepare a Digital Asset Basic Law within the year during a work report on the 15th. The law will define digital asset industries, establish regulatory systems, create fair markets, strengthen user protections, and institutionalize stablecoin issuance and distribution.
What are the two main contentious issues in South Korea's Digital Asset Basic Law?
The two main contentious issues are stablecoin issuer requirements and exchange major shareholder equity limits. The government is reviewing a plan to permit only bank-led consortiums holding over 50% equity as initial stablecoin issuers and to limit exchange major shareholder equity ratios to 15-20% or below. The industry opposes both restrictions, arguing they hinder market entry and weaken competitiveness.
