South Korea is on the brink of a major transformation in its cryptocurrency landscape, with lawmakers actively working to introduce the country’s first comprehensive crypto law. Dubbed the “Digital Asset Basic Act”, this legislation aims to enhance safety, transparency, and oversight for the rapidly growing digital asset market in South Korea.
Key Highlights of South Korea’s Digital Asset Basic Act
The proposed law introduces a regulatory framework that divides crypto-related businesses into eight distinct categories, including wallet services. Among these, two to three categories deemed “high-risk” will require detailed authorization from financial regulators, while the rest will only need to register.
One of the critical components of the act is the establishment of a Virtual Asset Committee, a dedicated government body tasked with crisis response. This committee, led by the Financial Services Commission (FSC) chairman, will tackle issues such as market hacks, system failures, and other emergencies. Members include representatives from the Bank of Korea and key ministries such as finance and science.
Rules for Stablecoin Issuers and Exchanges
The act outlines stringent capital requirements for stablecoin issuers. According to officials, these issuers must maintain at least 5 billion won (approximately $3.5 million) in capital, similar to the existing rules for electronic money businesses under the Electronic Financial Transactions Act.
Additionally, the bill proposes measures to limit exchange ownership, potentially capping major shareholders at 15-20%, a move designed to prevent market monopolies and enhance investor protection. Lawmakers are also considering allowing only specific entities to issue won-backed stablecoins.
What This Means for the Crypto Industry
If successfully passed, the Digital Asset Basic Act will position South Korea as a leader in cryptocurrency regulation across Asia. The proposed framework could set the tone for regional standards by 2026, particularly in stablecoin oversight, exchange management, and end-to-end crypto business categorization.
These steps reflect a proactive approach to managing the risks associated with the growing adoption of cryptocurrencies while fostering innovation in the digital economy.
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Stay tuned for further updates on South Korea’s Digital Asset Basic Act and how it could redefine crypto regulations in Asia.
