South Korea's governing Democratic Party has introduced the 'Digital Asset Basic Act', a proposed law aiming to establish a clear regulatory framework for digital assets. This includes provisions for 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, reserve requirements, and redemption obligations.
The proposal seeks to create a foundation for South Korea to lead in the global digital financial landscape. To issue digital assets, entities must meet specific requirements, including capital thresholds and operational capacity, and obtain approval. The legislation proposes the introduction of licensing, registration, and reporting requirements for digital asset businesses, covering areas such as trading, brokerage, and advisory services.
It also outlines rules for disclosures, internal controls, and market conduct, aiming to prohibit unfair practices like market manipulation. A digital asset committee would be established to oversee policy coordination and development of national plans for the sector.
The current system in South Korea is focused on protecting investors but lacks a comprehensive framework for issuance, disclosure, and market structure. This proposal follows recent announcements by the Financial Services Commission and Financial Supervisory Service, which mandated stricter withdrawal delay systems for domestic cryptocurrency exchanges to combat voice phishing scams.