South Korea's governing Democratic Party has unveiled a proposed 'Digital Asset Basic Act' that aims to establish a robust legal framework for digital assets. This includes regulations on issuance, trading, custody, and supervision. The proposal recognizes the growing significance of digital assets as a key link between the real economy and financial markets, and categorizes value-linked digital assets as those 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, with entities seeking to issue digital assets needing to meet specific requirements, including capital thresholds and operational capacity.
It also introduces licensing, registration, and reporting requirements for digital asset businesses and establishes rules on disclosures, internal controls, and market conduct. Furthermore, the proposal calls for the establishment of a digital asset committee to oversee policy and coordinate national plans for the sector, addressing the current lack of a comprehensive framework in South Korea's existing system.