South Korea has unveiled a draft law that would establish a comprehensive regulatory framework for digital assets, with stablecoins at the center of the proposed legislation as Seoul moves to formalize one of the world’s largest cryptocurrency markets.

 

The proposed Digital Asset Basic Act would introduce

  • licensing,

  • registration, and

  • reporting

requirements for cryptocurrency businesses, including exchanges, custodians, brokers and advisers, while creating a dedicated legal framework for issuing and supervising stablecoins.

 

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Under the proposal, issuers of fiat- and asset-backed stablecoins would be required to

  • obtain regulatory approval,

  • maintain adequate capital,

  • hold reserve assets to guarantee redemptions and meet operational, and

  • governance standards.

The bill also outlines refund reserve and redemption obligations aimed at protecting users.

The legislation follows months of debate between the Bank of Korea and the Financial Services Commission (FSC) over who should be allowed to issue Won-backed stablecoins. The central bank has argued that issuance should be limited to licensed commercial banks to safeguard financial stability, while the FSC has pushed for broader participation by fintech and technology firms to encourage innovation.

 

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The draft law also establishes a broader legal framework covering the issuance, trading, custody, and supervision of digital assets, marking South Korea’s latest effort to position itself as a regional digital finance hub while strengthening consumer protections following the 2022 collapse of the Terra ecosystem founded by South Korean entrepreneur, Do Kwon.

If enacted, the legislation would place South Korea alongside jurisdictions such as

  • the United States,

  • the European Union, and

  • Singapore

that have introduced dedicated stablecoin rules as governments race to regulate the fast-growing sector.

 

 

REGULATION | South Korea Draft Bill to Classify Stablecoins as Foreign Exchange Payment Instruments

 

 

 

 

 

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