South Korea Unveils Comprehensive Digital Asset Regulation with New Act

A major legislative initiative by South Korea's Democratic Party to regulate digital asset service providers, cryptocurrencies, and stablecoins has been launched with the implementation of a Digital Asset Basic Act. The bill, which was submitted on June 10, 2025, shortly after President Lee Jae-myung's inauguration, highlights the administration'S commitment to digital asset utilization and precise regulations. Key objectives include increasing transparency, protecting investors and positioning South Korea as a digital giant.'...

The bill includes a licensing requirement for Korean won-backed stablecoin issuers, which requires them to have 500 million and obtain approval from the Financial Services Commission (FSC) with 5% or less. It also requires measures such as bankruptcy isolation and strong reserve management to secure users' redemption rights.[Note 1]. The definition of digital assets is broad, unlike previous years' laws, and it covers all related activities and service providers, giving the FSC investigative and penalty powers for unfair trading. Moreover, It is being suggested that there be new entities, including a Digital Asset Committee under the President and dDigital Asset Industry Association for policy coordination and market oversight.

Local markets have experienced growth due to the Act, which is a result of President Lee Jae-myung's pro-crypto stance, and fintech stocks such as KakaoPay are showing signs of strength. Despite this, the Bank of Korea has expressed doubts about the potential impact of private stablecoins on monetary policy. The legislation conforms to international norms for managing stablecoin assets, but surpasses the capabilities of certain global models, such as the U.S. GENIUS Act.