South Korea advances landmark digital asset bill

TLDR

South Korea is moving its long-awaited Digital Asset Basic Act closer to law, setting stricter rules for stablecoins and crypto exchanges while formalizing its crypto market.

1. The Digital Asset Basic Act draft is finalized, with at least 5 billion won capital required for stablecoin issuers and a new crisis-response council for the crypto market.
2. The bill would shift exchanges into a licensed regime, add ownership caps around 1520 percent for major shareholders, and tighten governance and consumer protection.
3. Key power struggles over stablecoin oversight and final shareholding rules remain unresolved, so the exact shape and timing of the law still depend on upcoming political negotiations.

Deep Dive

1. What The Bill Actually Does

The ruling Democratic Party has finalized a draft of the Digital Asset Basic Act, aiming to submit it to the National Assembly before the Lunar New Year holiday in mid February 2026.

The bill would force stablecoin issuers to hold at least 5 billion Korean won in paid-in capital, roughly 3.5 million dollars, aligning them with electronic money rules and reducing undercapitalized issuers collapse risk. This requirement, along with a broader framework for tokenized products and service providers, is described in coverage of the draft Digital Asset Basic Act.

It also creates a Virtual Asset Committee, led by the Financial Services Commission (FSC) chair and including senior officials from the Bank of Korea and finance ministry, to coordinate rapid responses to hacks, outages, or other market disruptions.

2. How It Reshapes Exchanges And Oversight

The same legislative package would move exchanges from a simple three year notification registration into an authorization, or licensing, regime similar to securities venues.

As part of that shift, the FSC is advancing ownership caps so that major shareholders in domestic exchanges would be limited to about 1520 percent, a change that could force founders at platforms like Upbit and Coinone to cut stakes and meet governance tests.

The Act also divides digital asset businesses into eight categories, with two or three high risk types requiring full authorization and the rest operating on lighter registration, helping regulators scale oversight based on risk.

3. Open Questions And What To Watch

Several sensitive points are still contested. The FSC and Bank of Korea remain at odds over who should lead stablecoin oversight and how strictly bank-led consortia must control won-pegged issuers.

There is also internal debate over how hard to push exchange ownership caps, since industry and some ruling-party lawmakers argue the limits are rare globally and may weaken Koreas competitiveness.

At the same time, the bill sits inside a broader controlled opening that includes planned spot Bitcoin ETFs from 2026, tokenized securities rules, and the removal of a ban on venture capital investing in crypto firms, signaling Korea wants to attract crypto business, not just restrict it.

Conclusion

South Koreas Digital Asset Basic Act is a genuine structural step toward treating crypto as part of mainstream finance, combining stricter capital, licensing, and governance with a clearer path for institutional products.

If lawmakers resolve the central banks role and shareholder-cap details without over-tightening, Korea could emerge as one of Asias most important, and most tightly supervised, crypto hubs in the next cycle.