TLDR
South Korea is moving toward a single Digital Asset Basic Act that would unify multiple crypto and stablecoin bills into one comprehensive framework.
- The Financial Services Commission (FSC) aims to merge around 10 pending digital asset and stablecoin bills into one government backed Digital Asset Basic Act with the ruling party.
- The draft framework would set detailed rules for stablecoins, exchanges, disclosures and internal controls, building on existing user protection laws and alongside a planned 22 percent crypto income tax.
- Key disputes over who can issue won stablecoins and how much ownership large exchanges can hold remain unresolved, so timelines and the final shape of the law are still uncertain.
Deep Dive
1. Draft Law Overview
South Koreas FSC has told the National Assembly it plans a consolidated Digital Asset Basic Act with the ruling Democratic Party, designed to replace a patchwork of around 10 separate crypto and stablecoin bills with one negotiation text. Reports describe the act as the second stage of South Koreas digital asset legislation, complementing the existing Virtual Asset User Protection Act, with a target to complete the new law during 2026. The proposal would become the central framework for how stablecoins, exchanges and other virtual asset businesses are defined and supervised, but the bill wording and formal filing date have not yet been finalized.
2. Stablecoins, Exchanges And Investors
According to recent coverage of the planned consolidated Digital Asset Basic Act, the draft would regulate stablecoin issuance and circulation, digital asset business conduct, exchange entry standards, disclosure obligations, and internal control and system resilience requirements. This goes beyond the current focus on custody and unfair trading, moving toward bank like standards for technology, reserves and transparency. In parallel, a separate 22 percent tax on annual crypto income above a 2.5 million won exemption is scheduled for January 1, 2027, and a revised law expanding fraud refunds to include virtual asset losses takes effect in October 2025, signalling a broader push to treat digital assets more like traditional financial products.
South Korea is likely to remain open to crypto but with tighter, more bank style rules on stablecoins, exchanges and investor protection, which could raise compliance costs while reducing regulatory uncertainty.
3. Unresolved Issues And Next Steps
The most contentious points are who gets to issue won backed stablecoins and how tightly major exchanges are constrained. Draft discussions include a bank led consortium model where banks must control a majority stake in issuers, which the Bank of Korea supports for monetary stability, versus a more open licensing model for qualified non banks. Ownership caps in the 15 to 20 percent range for large exchanges are also under debate, with no final decision. At the same time, an opposition bill seeks to repeal the 22 percent crypto tax, but has not changed the scheduled start date.
Conclusion
South Koreas move to draft a unified Digital Asset Basic Act marks a shift from piecemeal rules to a single, comprehensive framework for stablecoins and crypto markets. The eventual balance between bank control, competition, and investor protection will determine whether the country remains a high activity retail market or evolves into a more institution driven hub, so watching how the ownership and tax debates are resolved will be critical for crypto users and businesses.
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