South Korea Aims for January Passage of Digital Asset Act After Deal

TLDR

• South Korea aims to pass a new digital asset act by January following an agreement on stablecoin regulations.
• Lawmakers have agreed on a consortium model for stablecoin issuance with banks holding a majority stake.
• The new act will build on the Digital Asset Basic Act passed earlier this year to regulate digital assets more like traditional financial products.
• South Korea is focused on creating a “Korean-style stablecoin” with clear safeguards around reserves and issuance.
• The government is pushing for timely legislation to avoid falling behind global players like the U.S., EU, and Japan in stablecoin oversight.

South Korea’s government aims to finalize a new digital asset act by January, following an agreement between ruling and opposition lawmakers. The focus of the legislation is the regulation of stablecoins, which had stalled negotiations for months. Lawmakers have now agreed on a framework that could pave the way for the country’s digital asset future.

Stablecoin Framework Reached After Months of Negotiations

The core dispute over stablecoin issuance has been settled. Lawmakers have agreed on a consortium model where banks hold the majority stake. This structure will also allow participation from technology firms, creating a balanced approach between stability and innovation.

The model aims to meet the Bank of Korea’s concerns about monetary stability. At the same time, it will enable the private sector to develop and issue stablecoins. This “Korean-style stablecoin” will have clear safeguards related to reserves and issuance.

Kang Joon-hyun, a senior Democratic Party lawmaker, emphasized the urgency of submitting the government’s official proposal.

Digital Asset Act to Build on Earlier Legislation

The new act will build on the Digital Asset Basic Act, passed earlier this year. The earlier law set important licensing standards for issuers and reserve protection rules. It also established compliance obligations for virtual asset service providers in South Korea.

The new bill will fill remaining gaps, especially in terms of treating digital assets like traditional financial products. It also provides clearer guidelines for foreign stablecoins, which are becoming increasingly important in the global market.

South Korea aims to regulate U.S.-based stablecoins more effectively. Global stablecoins like USDT and USDC continue to dominate, and clearer rules will help South Korean authorities maintain control.

South Korea Pushes for Timely Stablecoin Legislation

The government has emphasized the importance of passing the new act on time. Crypto adoption in South Korea has been rising rapidly, especially among people aged 20 to 50. Lawmakers are keen to avoid falling behind countries like the U.S., EU, and Japan, which have already tightened stablecoin oversight.

Delays in South Korea’s domestic regulation have raised concerns. Without proper regulatory frameworks, local firms could lose their competitive edge in the global market. The government plans to address this issue as quickly as possible.

In addition to the stablecoin framework, lawmakers have discussed other bills. One such bill aims to enhance financial security and market transparency. This includes proposed amendments to the Electronic Financial Transactions Act, focusing on stronger penalties for hacking incidents.

The government is also collaborating with opposition parties to reform capital markets. Proposed reforms include mandatory tender offers and updated rules for fairer share allocation to everyday investors.

South Korea is moving quickly to pass this new digital asset act. Officials are working with all parties to finalize the legislation during the National Assembly’s January session.

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