South Korea’s Democratic Party advances Digital Asset Basic Act to regulate crypto

South Korea’s Democratic Party has formally proposed the Digital Asset Basic Act, introducing a stablecoin licensing regime and expanded oversight under President Lee Jae-myung’s administration.

During a June 10 press conference, lawmaker Min Byeong-deok announced the bill’s submission, calling it a foundational step toward comprehensive regulation of digital assets, including stablecoins, cryptocurrencies, and related service providers. 

Min said the legislation was designed to enhance transparency and investor protection while positioning South Korea as a global leader in the digital economy.

The Digital Asset Basic Act builds on the existing Virtual Asset Investor Protection Act, which came into effect in July 2024.

While the previous legislation focused primarily on safeguarding investors, the new proposal outlines a broader framework that defines digital assets, establishes new licensing and approval systems, and mandates oversight mechanisms under the Financial Services Commission.

A key feature of the bill is the licensing requirement for issuers of Korean won-backed stablecoins. 

Notably, issuers must maintain a minimum capital of ₩500 million (approximately $367,890) and obtain approval from the Financial Services Commission.