South Korea's governing Democratic Party has introduced a 'Digital Asset Basic Act' that aims to establish a regulatory framework for digital assets, including their issuance, trading, custody, and supervision. The proposal acknowledges the growing importance of digital assets as a key link between the real economy and financial markets. It categorizes value-linked digital assets, such as those tied to fiat currencies or real-world assets, as requiring authorization from issuers, refund reserves, and redemption obligations. The proposed legislation seeks to create a foundation for South Korea to lead the global digital financial order by introducing licensing, registration, and reporting requirements for digital asset businesses.
It also outlines rules for disclosures, internal controls, and market conduct, including prohibitions on unfair trading practices. A digital asset committee would be established to review and coordinate policy, and national plans for the sector would be developed.
The proposal addresses the current system's limitations, which focus primarily on investor protection and lack a comprehensive framework for issuance, disclosure, and market structure. This move follows the introduction of new rules by the Financial Services Commission and Financial Supervisory Service, mandating domestic cryptocurrency exchanges to implement a unified system for delaying withdrawals to combat voice phishing scams.