In June 2025, Representative Min Byeong-deok of the Democratic Party of Korea introduced the Digital Asset Basic Act (DABA) to the National Assembly. This legislation seeks to establish a unified legal framework for digital assets, addressing the need for comprehensive regulation in a rapidly evolving market. (biz.chosun.com)
Key Provisions of the Digital Asset Basic Act
The DABA outlines several critical components:
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Definition and Scope: The act defines digital assets as properties of economic value created and stored using distributed ledger technology, excluding electronic money and similar instruments. (shinkim.com)
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Licensing and Capital Requirements: Stablecoin issuers must hold a minimum of 500 million Korean won (approximately $368,000) in equity capital. (crypto2community.com)
Investor Identification, Introduction, and negotiation.
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Reserve and Custody Standards: Issuers are required to maintain full fiat backing for their stablecoins, held in bankruptcy-remote bank accounts, with periodic third-party audits to ensure transparency and mitigate credit risk. (krw1.kr)
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Regulatory Oversight: The Financial Services Commission (FSC) and the Bank of Korea (BOK) will share oversight responsibilities, particularly concerning systemic risk and monetary policy impacts. A self-regulatory body, envisioned as the Korea Digital Asset Industry Association, may also be created to conduct token reviews and enforce disclosures. (krw1.kr)
Establishment of the Digital Asset Committee
A significant aspect of the DABA is the proposal to establish a presidentially appointed Digital Asset Committee. This committee aims to strategically nurture related industries at a national level, coordinate policies, and oversee the issuance and regulation of digital assets. (biz.chosun.com)
Implications for the Digital Asset Market
The introduction of the DABA marks a pivotal step in South Korea’s approach to digital asset regulation. By providing a clear legal framework, the act aims to enhance market stability, protect investors, and position South Korea as a global leader in the digital economy. (koreatimes.co.kr)
Global Context and Comparisons
South Korea’s move aligns with global trends toward comprehensive digital asset regulation. For instance, the European Union’s Markets in Crypto-Assets Regulation (MiCA) seeks to provide legal clarity and ensure consumer protection while promoting a single European market for digital assets. (koreatimes.co.kr)
Industry Reactions and Future Outlook
Industry participants are closely monitoring the DABA’s progress, recognizing its potential to reshape the digital asset landscape. The act’s emphasis on clear definitions, licensing, and reserve requirements is expected to foster a more secure and transparent market environment. (koreatimes.co.kr)
Conclusion
South Korea’s Digital Asset Basic Act represents a significant advancement in the regulation of digital assets, particularly stablecoins. By establishing a comprehensive legal framework and oversight mechanisms, the act aims to balance innovation with investor protection, setting a precedent for other nations considering similar regulatory approaches.
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