What To Know:
- South Korea’s Democratic Party is nearing completion of the Digital Asset Basic Act, though disputes over stablecoin issuance rules and exchange ownership limits continue to delay the final draft.
- Lawmakers agreed on a 5 billion won minimum capital requirement for stablecoin issuers
- They have proposed a new inter-ministerial Virtual Asset Council to manage market risks and emergencies.
South Korea’s ruling Democratic Party is moving closer to shaping the country’s next phase of crypto regulation, even though key disagreements continue to slow the final draft of its long-anticipated legislation.
Lawmakers confirmed this week that discussions are still ongoing over the Digital Asset Basic Act, a bill designed to bring the virtual asset market firmly under institutional oversight. Even as progress has been made on the structure and scope of the law, unresolved debates around stablecoin issuance and ownership limits for crypto exchanges remain at the center of negotiations.
South Korea’s Democratic Party Deliberates Crypto Legislation
According to local media reports, party officials are currently focused on defining who should be permitted to issue won-denominated stablecoins and how much influence large shareholders should be allowed to hold within trading platforms. These questions have exposed clear divisions between lawmakers, regulators, and monetary authorities.
The Democratic Party has stated its intention to complete the bill and submit it before the Lunar New Year holiday. The timeline reflects growing political pressure to establish clearer rules for a market that has expanded rapidly while operating under fragmented oversight.
The party’s crypto Task Force has been leading the effort. During its second plenary session at the National Assembly Hall on January 28, members reviewed the overall legislative direction and attempted to narrow remaining gaps. The meeting was chaired by Representative Lee Jung-moon, who confirmed that final coordination with the party’s policy committee and government agencies is now underway.
One of the most sensitive topics discussed was the regulation of stablecoins, particularly those pegged to the Korean won. These cryptos have drawn increasing scrutiny due to their potential impact on monetary stability and payment systems.
Ahn Do-gul, who serves as secretary of the task force, said lawmakers reached consensus on setting a minimum capital requirement of 5 billion won for stablecoin issuers. The figure mirrors the existing threshold applied to electronic money businesses under the Electronic Financial Transactions Act. Officials said the alignment reflects similarities between stablecoins and traditional digital payment instruments.
Beyond issuance requirements, the task force also outlined a new governance framework aimed at managing systemic risks. A proposed inter-ministerial body, tentatively named the Virtual Asset Council, would be established to respond to emergencies such as hacking incidents or infrastructure failures.
Under the plan, the chairman of the Financial Services Commission would lead the council. Members would include senior officials from the Bank of Korea, the Ministry of Economy and Finance, and the Ministry of Science and ICT. The goal is to enable faster coordination during market disruptions.
The role of the central bank has proven more difficult to define. The Bank of Korea had earlier argued for broad supervisory authority, including an effective veto role within the Digital Asset Committee. That proposal has met resistance within the task force.
Instead, lawmakers agreed to introduce a formal consultation process between regulators and the central bank. Lee Jung-moon said discussions between the Financial Services Commission and the Bank of Korea are ongoing, with most legislators favoring an agreement-based model rather than direct control by monetary authorities.
Another unresolved issue involves who may issue stablecoins. The Bank of Korea has advocated limiting issuance to consortiums controlled by banks, with a majority stake of 50 percent plus one share. Several lawmakers oppose that structure, arguing it could discourage innovation and concentrate power within the traditional financial sector.
Representative Lee Kang-il acknowledged sharp disagreement between the National Assembly and the government on the issue. A mediation proposal has been delivered to both sides, though details remain confidential. Lawmakers said any final decision must balance financial stability with broader public and national interests.
The bill’s name has now been provisionally confirmed as the “Basic Act on Digital Assets.” Party officials said the title was selected for clarity after multiple legislative proposals were combined into a single framework.
Structurally, the act is designed to regulate cryptos while supporting industry development. The task force has divided the sector into roughly eight functional categories. Businesses deemed high-risk or requiring strong public trust would need formal authorization from financial authorities. Other sectors would face lighter requirements and operate under a registration system.
One proposal was ultimately excluded from the current draft. Lawmakers chose not to apply a strict 15 percent ownership cap on major shareholders of virtual asset exchanges, a rule used for alternative trading platforms under the Capital Markets Act.
Lee Jung-moon said there is broad agreement on the purpose of limiting excessive influence by dominant shareholders.
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