Key Takeaways
- Any issuer of stablecoins must secure regulatory approval and maintain a minimum of 500 million Korean won (approximately $368,000) in proprietary capital.
- The stablecoin issuers will also be required to guarantee refunds through reserves and secure regulatory approval from the Financial Services Commission
South Korean lawmaker Min Byeong-deok, a member of the ruling Democratic Party, has introduced a new legislative proposal aimed at tightening crypto oversight. The proposed bill, titled the “Digital Asset Basic Act,” was unveiled during a press conference held Tuesday and is positioned as a cornerstone in the nation’s effort to build a robust and all-encompassing crypto regulatory framework.
The proposed legislation builds upon the Virtual Asset Investor Protection Act, which is scheduled to come into force in July 2024.
Under the bill, a licensing regime for stablecoin issuers will be set up. Any issuer of stablecoins must secure regulatory approval and maintain a minimum of 500 million Korean won (approximately $368,000) in proprietary capital.
The stablecoin issuers will also be required to guarantee refunds through reserves and secure regulatory approval from the Financial Services Commission. As per the official statement, the new Digital Asset Basic Act seeks to provide a broader regulatory architecture which will encompass and cover everything from the issuance of digital assets to their trading and management.
Under the proposed bill, a Digital Asset Committee will be established which will be directly supervised by the president’s office, which will help ensure the government has a more timely grasp of market dynamics
Min Byeong-deok, who served as the head of digital asset policy during President Lee Jae-myung’s campaign, emphasised that the bill aligns with one of the president’s core economic promises.
The President, on multiple occasions, have expressed interest in the development of stablecoins based on the Korean won and is looking to prevent capital outflow to stablecoin markets based on the US dollar and similar foreign currencies
