The Democratic Party of South Korea has proposed the 'Digital Asset Basic Act', which aims to establish a robust legal framework for digital assets. This includes regulations for issuance, trading, custody, and supervision.
The proposal acknowledges the growing significance 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 proposal 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. The legislation also introduces licensing, registration, and reporting requirements for digital asset businesses and establishes rules on disclosures, internal controls, and market conduct. A digital asset committee is also proposed to review and coordinate policy, along with national plans for the sector.
This comes as South Korea's current system is focused on investor protection but lacks a comprehensive framework for digital assets.