Nikolas Sargeant
South Korea's ruling Democratic Party has introduced the Digital Asset Basic Act, a legislative proposal aimed at legalizing the issuance of stablecoins by local companies. The bill stipulates that companies must have a minimum equity capital of 500 million won (approximately $368,000) and guarantee redemptions through reserves, with regulatory approval from the Financial Services Commission.
This move aligns with President Lee Jae-myung's campaign promises to modernize the country's crypto regulations. The legislation seeks to improve transparency and encourage competition within the digital asset sector. Additionally, President Lee has advocated for the establishment of a won-backed stablecoin market to prevent national wealth from leaking overseas.
The proposal has garnered attention amid a surge in stablecoin trading in South Korea, with transactions involving leading US dollar stablecoins reaching 57 trillion won ($42 billion) on five main domestic exchanges in the first quarter. The new legislation aims to bolster such trades and further develop one of the region's largest crypto markets.
However, the initiative faces opposition from the Bank of Korea, which has expressed concerns that non-bank stablecoins could weaken monetary policy effectiveness. The central bank argues that it should take the lead in regulating a local currency stablecoin.
