- The Financial Services Commission of South Korea has proposed a new law to license stablecoin issuers and broad crypto oversight.
- Digital Asset Basic Act requires local stablecoin issuers to own at least ₩500 million and obtain regulatory permission.
- The new committee and industry body will coordinate the policy and monitoring of tokens.
The Democratic Party of South Korea has proposed a comprehensive bill that would establish a stablecoin licensing framework and heighten digital asset regulatory oversight. Representative Min Byeong-deok broached the Digital Asset Basic Act on June 10, outlining some key regulatory measures to boost transparency and protect investors in the county’s fast-expanding crypto market.
The proposed legislation marks a big shift under President Lee Jae Myung’s new administration. It goes beyond investor safeguards, atop the Virtual Asset Investor Protection Act, which took effect last July. The bill determines what digital assets are, intensifies licensing processes, and enhances the Financial Services Commission (FSC)’s supervisory powers over the sector.
FSC approval and other strict financial criteria will be mandated for issuers of stablecoins. In addition, the rules include a minimum capital requirement of ₩500 million (or about $367,890). In addition, issuers must enforce reserve backing and bankruptcy remoteness to protect user funds from the issuer if the issuer becomes insolvent.
Lee Administration Pushes Crypto Policy Forward
South Korea’s new President, Lee Jae Myung, who was sworn in last week after winning more than 49 percent of the vote, has always been supportive of crypto adoption. He pledged that he was going to secure legal recognition for spot crypto ETFs and gain institutional investors access to digital markets. These promises are in line with the Digital Asset Basic Act, which makes South Korea ready to compete in the global digital asset economy.
One of the key elements of the bill is to create a Digital Asset Committee under the presidential office. The crypto regulation would be coordinated at a national level by the policy of this body. A separate Digital Asset Industry Association will monitor token evaluations for exchanges and market behavior, as far as listing tokens on the exchange.
Under the proposal, the FSC can impose penalties on unfair trading activities, and also retains the power to investigate. In addition, it imposes new registration, approval, and reporting requirements for firms conducting activities in the digital asset ecosystem.
Rising Global Focus on Stablecoin Regulations
The proposal comes amid global interest in stablecoin regulation. In May, the total market value of stablecoins hit an all-time high of $250 billion, reflecting rising demand. Jurisdictions like the U.S. and UAE are also advancing legislation, with bills such as the GENIUS and STABLE Acts awaiting passage in the U.S. Congress.
The announcement has sparked movement in South Korea’s financial markets. KakaoPay, a mobile payment firm with crypto exposure, surged by as much as 45% over the past five days, according to Google Finance data.
However, analysts have warned against excessive optimism. JPMorgan’s Stanley Yang and Jihyun Cho said the rally in Kakao-related shares lacks solid justification. They noted that the long-term impact of the proposed stablecoin law remains uncertain.
