The Democratic Party of South Korea has proposed a new 'Digital Asset Basic Act', aiming to establish a robust legal framework for digital assets, encompassing issuance, trading, and supervision. The proposal acknowledges the growing significance of digital assets as a key link between the real economy and financial markets, and defines value-linked digital assets as those requiring authorization from issuers, refund reserves, and redemption obligations. This move comes after stalled negotiations on the Digital Asset Basic Act earlier this year, due to disagreements between regulators over the issuance of stablecoins pegged to the Korean won.
The proposed legislation seeks to 'lay the groundwork for Korea to lead the global digital financial order' by introducing licensing, registration, and reporting requirements for digital asset businesses, and establishing rules on disclosure, internal controls, and market conduct. A digital asset committee would be created to review and coordinate policy, and national plans would be developed for the sector.
The proposal aims to address the current lack of a comprehensive framework in South Korea, which focuses primarily on investor protection. This development follows the introduction of new rules by the Financial Services Commission and Financial Supervisory Service, requiring all domestic cryptocurrency exchanges to implement a unified system for delaying withdrawals to combat voice phishing scams.