TLDR
South Korea has finalized a draft Digital Asset Basic Act that would impose much stricter requirements on stablecoin issuers.
- The bill sets a roughly 5 billion won (about 3.5 million dollars) minimum capital requirement for stablecoin issuers and creates a new crisis-response council.
- Lawmakers are also discussing 100 percent reserve backing and strong liability standards, which would favor bank-like, fully collateralized stablecoins over lightly backed tokens.
- The draft is not law yet, with disputes over who oversees stablecoins and related exchange rules still to be resolved before a National Assembly vote.
Deep Dive
1. What The Draft Actually Changes
South Koreas ruling Democratic Party has finalized a draft Digital Asset Basic Act that would require stablecoin issuers to hold at least 5 billion won in paid-in capital, positioning them closer to electronic money firms in financial law terms.The draft requirement is designed to ensure issuers can absorb losses and operational risks.
The bill would also create a Virtual Asset Committee, led by the Financial Services Commission chair and including the Bank of Korea and finance ministry officials, to coordinate rapid responses to hacks and system failures in the crypto market.The planned committee would centralize incident management.
Issuing a regulated stablecoin in Korea would start to look like operating a financial institution, not a lightweight tech startup.
2. How It Could Reshape Stablecoins
Some legislative proposals tied into the Act include requirements for 100 percent reserve backing and no fault liability for operators, meaning issuers could be on the hook to make users whole even without clear negligence.These proposals are still being negotiated but show the direction of travel.
The Bank of Korea has flagged that foreign currency stablecoins, especially dollar-pegged ones, could accelerate capital flight and weaken capital controls, so Korean rules may be particularly tight around who can issue won or dollar stablecoins in the local market.Regulator comments highlight these concerns.
Larger, well-capitalized financial players are more likely to meet these standards, while small or under?collateralized stablecoin projects could struggle to access the Korean market.
3. Status, Timing, And What To Watch
The draft is a party proposal, not yet enacted law. Lawmakers aim to submit it before the Lunar New Year, with committee review and a full Assembly vote still ahead.Draft timing points to debates through 2026.
Key unresolved questions include: which entities are allowed to issue won-denominated stablecoins, how far to go with exchange ownership caps, and how supervisory power is split between the Financial Services Commission and the Bank of Korea.
Until the final text passes, details can change; stablecoin issuers and Korean users should watch who gets issuance rights and whether foreign stablecoins are treated more restrictively.
Conclusion
South Korea is moving toward a tightly supervised, bank-like model for stablecoins that raises the bar on capital, reserves, and governance. If implemented as signaled, the framework could limit weaker issuers but ultimately make regulated stablecoins in Korea more robust and attractive for institutions, while leaving some uncertainty until the political fight over oversight and issuance rights is resolved.
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