South Korea’s Democratic Party Proposes Digital Asset Basic Act to Regulate Crypto

South Korea’s Democratic Party has formally introduced the Digital Asset Basic Act, marking a significant step toward comprehensive regulation of digital assets. The bill, announced by lawmaker Min Byeong-deok during a June 10 press conference, aims to establish a stablecoin licensing regime and expand oversight under President Lee Jae-myung’s administration.

The legislation builds on the existing VIRTUAL Asset Investor Protection Act, which took effect in July 2024. While the prior law focused on investor safeguards, the new proposal outlines a broader framework. It defines digital assets, introduces licensing and approval systems, and mandates oversight by the Financial Services Commission.

A key provision requires issuers of Korean won-backed stablecoins to maintain a minimum capital of ₩500 million (approximately $367,890) and obtain regulatory approval. The bill also enforces safeguards like bankruptcy remoteness and reserve management to protect user redemption rights.

The MOVE positions South Korea as a potential leader in the digital economy, emphasizing transparency and investor protection. The act covers stablecoins, cryptocurrencies, and related service providers, reflecting growing institutional recognition of digital assets.