South Korea advances through encryption regulations, Eye Stablecoin supervision
A South Korean MP has proposed a comprehensive bill that aims to create a more structured regulatory environment in the country. The proposed legislation, known as the Digital Assets Basic Law, was announced Tuesday by ruling Democratic Party member Min Byeong-Deok.
The bill aims to complement the Virtual Asset Investor Protection Act, which came into effect in July 2024, goes beyond investor safeguards to determine the broader legal basis for digital asset activity.
Aligned with global stability trends
In a press conference, Mill described the bill as a step to positioning South Korea as a global leader in the digital economy. The key feature of the legislation is the implementation of a licensing system for Stablecoin issuers.
Under the proposed rules, Stablecoin operators will be required to hold at least 500 million Korean won (approximately $367,890) in the owner’s capital to obtain a license. The requirement is designed to ensure financial accountability and support the broader goal of promoting stability in South Korea to win.
The Stablecoin license rule appears to support the government’s broader policy agenda under President Lee Jae-Myung, who had previously promised to achieve the domestic Stablecoin market.
Min, who led the Digital Assets Committee during President Lee’s campaign, noted that the measure aims to curb capital flight through stable and stable measures based on foreign currencies and support a strong local digital financial system.
Legislative promoters follow similar developments in other jurisdictions. In the United States, the Genius Act, which addresses Stablecoin regulations, is gaining appeal with the support of President Donald Trump. Meanwhile, Hong Kong recently issued its own licensing framework for Stablecoin issuers.
These international examples seem to inform the Korean approach, as Min emphasizes similarities to regulatory practices in the United States, the EU and Japan, especially with regard to the issuance, distribution and transaction of digital assets.
Establish broader supervision of digital assets
In addition to Stablecoins, the Digital Assets Base Act aims to provide legal clarity to the responsibilities of service providers operating in the digital asset classification and ecosystem.
The bill includes provisions for the establishment of a Digital Assets Commission, which is directly supervised by the President’s Office, emphasizing a centralized oversight mechanism.
In addition to structural reforms, the proposed legislation outlines the legal framework for addressing market misconduct. These include penalties for unfair trade practices such as price manipulation or dissemination of false information, areas that were not directly addressed by previous laws.
The bill also includes measures to standardize compliance procedures for exchanges and custodians in the country. If enacted, the Basic Law on Digital Assets will mark an important step in the development of South Korea’s crypto-regulatory space.
As jurisdictions around the world continue to develop their approach to digital finance, South Korea’s proposed framework positioned it in countries seeking to balance innovation and oversight. The bill is expected to be further reviewed and discussed in the National Assembly in the coming months.
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