South Korea proposes sweeping Digital Asset Framework

TLDR

South Koreas ruling party has unveiled a draft Digital Asset Framework that would pull most crypto activity firmly into the traditional financial rulebook.

1. The draft Digital Asset Framework/Basic Act creates a full licensing regime for exchanges, brokers, custodians and issuers, with strict rules on reserves, disclosures and market conduct.
2. Stablecoins and tokenized real?world assets face bank?style treatment, including trust custody, foreign?exchange oversight and likely bans on interest payments, which could consolidate the market around larger issuers.
3. The bill is still a proposal, with timing and some details unresolved, so the key watchpoints are how fast it passes, how strict final rules are, and how Korean exchanges adapt.

Deep Dive

1. What The New Framework Actually Does

South Koreas Democratic Party has introduced a draft Digital Asset Framework Act / Digital Asset Basic Act that would create a comprehensive legal regime for digital assets, covering issuance, trading, custody and supervision nationwide. Reports describe it as requiring all digital asset businesses - trading venues, brokers, custodians and advisors - to obtain licenses, register and meet ongoing reporting and internal control standards, including explicit bans on market manipulation and abuse of non?public information.

For issuers of value?linked digital assets, such as fiat?pegged or asset?backed tokens, the bill demands prior authorization plus capital, reserve and redemption obligations similar to traditional finance, according to a detailed policy summary and a community recap. A new Digital Asset Committee would coordinate national strategy and policy in the sector.

2. Stablecoins And RWA Tokens Under Finance Law

Separate draft language would classify stablecoins used in cross?border payments as means of payment under the Foreign Exchange Transactions Act, bringing them under FX regulators without creating a new license class. Issuers of real?world asset (RWA) tokens would have to keep underlying collateral in regulated trust accounts under the Capital Markets Act, effectively plugging tokenization into existing securities custody systems.

The same draft reportedly bans interest payments on value?stable tokens and instructs the Financial Services Commission to set technical standards so stablecoins and other digital assets can interoperate across networks, according to coverage of the draft. Smaller domestic stablecoin payments for everyday purchases may be exempt from FX reporting, but larger and cross?border flows would face close monitoring.

3. Impact On Exchanges And What To Watch Next

In parallel with the draft law, regulators have already mandated unified withdrawal delays at all local exchanges to combat phone?based fraud, sharply limiting who can bypass holds and tightening monitoring of suspicious flows, as detailed in recent exchange rules updates. This gives a taste of how operationally strict the new framework could be.

The Digital Asset Framework Act remains at the draft stage and is open to public comment, with previous attempts delayed by disagreements over issues such as who can issue won?pegged stablecoins and potential exchange ownership caps. For crypto users and firms, the key signals to watch are: parliamentary progress on the bill, final wording on stablecoin and RWA requirements, and how Korean exchanges adjust listings, onboarding and withdrawal policies as rules harden.

Conclusion

South Koreas proposed Digital Asset Framework would move the country from partial oversight to a highly formalized regime that embeds stablecoins, tokenization and exchanges into existing financial law. For the global market this points to a world where major jurisdictions increasingly treat core crypto functions like regulated finance, raising compliance costs but also potentially unlocking more institutional participation for projects that can meet the new standards.