South Korean Lawmaker Introduces Comprehensive Bill to Regulate Crypto Assets

The proposed legislation, known as the Digital Asset Basic Act, was announced Tuesday by Min Byeong-deok, a member of the ruling Democratic Party.

South Korean lawmakers are pushing to establish a more structured regulatory environment for crypto assets in the country.

A comprehensive bill aimed at setting up a legal foundation for digital asset activity was proposed Tuesday by Min Byeong-deok, a member of the ruling Democratic Party.

The proposed legislation, known as the Digital Asset Basic Act, is designed to complement the Virtual Asset Investor Protection Act, which came into effect in July 2024. While the latter law focused on safeguarding investors, the new bill takes a broader view of the digital asset landscape.

The bill, which was announced at a press conference, is part of a broader move to position South Korea as a global leader in the digital economy.

To align with global trends in stablecoin regulation, the proposed legislation introduces a licensing system for stablecoin issuers.

Under the proposed rules, stablecoin operators would need to hold a minimum of 500 million Korean won (approximately $367,890) in owner’s capital to qualify for a license. This capital requirement is aimed at ensuring financial accountability for stablecoin firms.

The stablecoin licensing provision appears to support the administration’s broader policy agenda. President Lee Jae-myung’s administration is aiming to promote Korean won-denominated stablecoins.

Min, who helmed the digital asset committee during President Lee’s election campaign, stated that the measure is designed to prevent capital outflows through foreign-currency-based stablecoins and foster a strong local digital financial system.

The proposed legislation comes amid similar developments in other jurisdictions. In the United States, the bill to address stablecoin regulation—the Genius Act—is gaining momentum with support from President Donald Trump.

Hong Kong recently enacted its own licensing framework for stablecoin issuers, while the European Union is also advancing proposals for regulating stablecoins and other digital asset categories.

These international examples appear to be informing South Korea’s approach, as Min highlighted parallels with regulatory practices in the US, European Union, and Japan, particularly regarding the issuance, distribution, and trading of digital assets.

Beyond stablecoins, the Digital Asset Basic Act sets out to classify digital assets and define the responsibilities of service providers operating within the ecosystem.

The bill also mentions the creation of a Digital Asset Committee to be directly overseen by the Office of the President, suggesting a centralized oversight mechanism for coordinating digital asset policy.

In addition to structural reforms, the proposed legislation introduces legal frameworks to address market misconduct. This includes penalties for unfair trading practices such as price manipulation or the dissemination of false information—areas not covered by the existing investor protection law.

The bill also includes measures to standardize compliance procedures for exchanges and custodians operating in the country.

If enacted, the Digital Asset Basic Act would represent a significant step in the evolution of South Korea’s crypto regulatory landscape.

As jurisdictions around the world continue to develop their approaches to digital finance, South Korea’s proposed framework positions it among the countries seeking to balance innovation with oversight.

The bill is expected to undergo further review and discussion in the National Assembly in the coming months.