South Korea’s ruling Democratic Party on Wednesday proposed a “Digital Asset Basic Law” that would establish a legal framework for digital assets, including issuance, trading, custody and supervision.
“Digital assets are emerging as a central medium connecting the real economy and financial markets,” the proposal states. Defines value-linked digital assets, including those linked to fiat currencies or real-world assets, as a category that requires issuer authorization, redemption reserves, and redemption obligations.
The new proposal comes amid stalled negotiations over the Basic Law on Digital Assets since earlier this year, when regulators clashed over who should be allowed to issue won-pegged stablecoins. The Bank of Korea insisted that banks with 51% ownership should be the only ones allowed to issue stablecoins, while the Financial Services Commission warned that this could hinder innovation.
The bill also says it aims to “establish a foundation for Korea to lead the global digital financial order.” Under the proposal, entities wishing to issue such assets must obtain approval and meet requirements including capital thresholds, operating capacity and reserve plans.
The legislation would introduce licensing, registration and reporting requirements for digital asset companies, including trading, brokerage, custody and advisory services.
It would also establish rules on disclosure, internal controls and market conduct, including prohibitions on unfair trade practices such as market manipulation and the use of non-public information.
The proposal calls for the creation of a digital assets committee to review and coordinate policies, as well as basic national and implementation plans for the sector.
He also noted that South Korea’s current system remains focused on investor protection and lacks a comprehensive framework covering issuance, disclosure and market structure.
The proposal follows the announcement of new rules on Wednesday by the country’s Financial Services Commission and Financial Supervisory Service ordering all domestic cryptocurrency exchanges to adopt a single, strict system for delaying withdrawals. The goal is to block a rise in speed-dependent voice phishing scams.
