South Korea’s ruling Democratic Party (DP) is preparing to submit the second phase of cryptocurrency-related legislation as early as next month. Following its first-step “Cryptocurrency User Protection Act,” the new “Digital Asset Innovation Act” aims to comprehensively regulate issuance, distribution, custody, and payment systems related to digital assets.
A key highlight of the draft bill—premised to be proposed by DP lawmakers including Kang Jun-hyun—is the raising of the capital requirement for stablecoin issuers from the existing ₩500 million to ₩1 billion. The goal is to strengthen financial soundness and prevent market malpractices like rug pulls.
Under the proposal, stablecoin issuers would also have to meet robust disclosure and oversight standards, including:
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Maintaining full reserves (100% backing)
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Monthly internal audit reports and annual external audit reports
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Submission of reserve asset structure and operation to regulators
Furthermore, the legislation reinforces the Bank of Korea’s oversight authority, allowing it to request issuer documents, demand audits, and voice opinions to the Financial Services Commission on stablecoin applications.
DP officials emphasize that this legislative framework seeks not just protection but the streamlined digital asset ecosystem envisioned in the presidential campaign. Crucially, the Act also proposes forming a Digital Asset Committee under the FSC, with a board including a majority of private-sector and industry experts.
