TLDR
South Korea has finalized a draft "Digital Asset Basic Act" that would create a comprehensive regulatory framework for crypto, especially stablecoins and service providers.
- The draft sets a 5 billion won (about 3.5 million dollars) capital minimum for stablecoin issuers and defines a broad framework for digital asset businesses.
- It fits into a wider pivot toward regulated crypto growth in Korea, including plans for spot Bitcoin ETFs, tokenized securities, and clearer investor protections.
- The bill still needs to be formally submitted and debated, with key uncertainties around stablecoin issuer eligibility, exchange ownership caps, and how strict implementation will be.
Deep Dive
1. Bill Scope And Key Rules
The Democratic Partys digital asset task force has finalized the draft of the "Digital Asset Basic Act", aiming to be the core law for Koreas virtual asset market. Lawmakers describe it as a comprehensive regime for stablecoins, tokenized products, and digital asset service providers, with submission to parliament targeted before the Lunar New Year political window, according to the partys own task force statements in coverage of the Digital Asset Basic Act draft.
A central feature is a legal capital requirement: stablecoin issuers would need at least 5 billion won in paid-in capital (about 3.5 million dollars), aligning them with stricter electronic money standards and reducing fly-by-night issuers, as detailed in a related proposal that sets 3.5M minimum for stablecoin issuers. The draft also touches governance, with prior guidance indicating that limits on major shareholders stakes in key digital asset firms, including exchanges, may be embedded in this second-phase law.
Korea is moving from piecemeal crypto rules toward a single umbrella law that defines who can issue stablecoins and run major platforms, and on what financial footing.
2. Implications For Crypto Market
The bill comes after the Virtual Asset Users Protection Act, which already bans insider trading and market manipulation, and amid proposals to cap controlling shareholders in exchanges at roughly 15 to 20 percent, as reported in a plan that proposes crypto exchange ownership cap. That combination points to tighter governance and reduced concentration of control at major venues like Upbit and Coinone.
At the same time, lawmakers are positioning Korea as a regulated but pro-crypto center. Recent policy moves include plans to allow spot Bitcoin ETFs from 2026, enable trading of tokenized securities through amendments to the Capital Markets Act, and lift a ban on venture capital investment in crypto firms, all framed in a push to attract crypto business in a report on Korea having finalized its digital asset bill draft.
For serious issuers and exchanges, the direction is more compliance but also more legitimacy and access to institutional products, while weaker or undercapitalized players could be squeezed out.
3. Next Steps And Open Risks
Politically, the Democratic Party aims to table the bill before next month, but it still faces negotiation among lawmakers and between regulators. The act is partly designed to settle turf battles between the Financial Services Commission and the Bank of Korea over who oversees stablecoins, yet reporting on the Digital Asset Basic Act draft notes that institutional rivalry remains beneath the surface.
Key open questions for the market include whether only bank-led consortia or also non-bank fintech and crypto firms will be allowed to issue won stablecoins, how strict exchange ownership caps will be, and how fast subordinate rules and licensing regimes will roll out. If requirements are set too high, activity could migrate to offshore venues; too low, and Korea risks repeating earlier crypto scandals.
The headline is positive for regulatory clarity, but the fine print on who can issue, who can own exchanges, and how rules are enforced will determine whether Korea becomes a competitive, high-trust crypto hub.
Conclusion
South Koreas finalized draft of the Digital Asset Basic Act signals a shift from ad hoc crypto oversight toward a capital- and governance-heavy framework aimed at investor protection and institutional adoption. The combination of stablecoin capital floors, potential ownership caps, and parallel moves on ETFs and tokenization could make Korea one of the more tightly supervised but attractive regulated markets in Asia, provided the upcoming legislative debate resolves regulator conflicts without stifling innovation.
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