South Korea's "Digital Asset Basic Act" Delayed Until Next Year Due to Disagreements

According to Yonhap News Agency on December 30, the South Korean government is drafting the "Digital Asset Basic Act" (Phase Two Virtual Asset Bill), which introduces investor protection provisions such as no-fault compensation. The aim is to strengthen investor protection, and the bill is currently under review led by the Financial Services Commission.

The bill was originally scheduled to be submitted for review in the new year, but due to disagreements with organizations such as stablecoin issuers, the submission may be delayed until next year.

Specifically, the new law requires digital asset operators to comply with explanatory obligations, terms, and conditions similar to those in the financial industry, and to bear strict damages compensation responsibilities in the event of hacking attacks or computer failures.

Additionally, the bill mandates stablecoin issuers to allocate reserve assets into low-risk areas such as deposits and government bonds, and to deposit or entrust 100% of the issuance balance into banks or other custodial institutions, preventing the risk of issuer bankruptcy from being transferred to investors from the source.

The bill also plans to allow digital asset sales domestically, provided that relevant information is fully disclosed, addressing the long-standing issue of evading domestic listing procedures.

However, there are significant disagreements between the Bank of Korea and the Financial Services Commission (FSC) on whether to establish a new "consensus institution" to approve stablecoin issuance, as well as on the minimum capital threshold for issuers (ranging between 500 million to 25 billion Korean won).

Overall, although the general direction of the regulatory framework has been set, the final rules for South Korea's crypto market will still be shaped through negotiations among the government, the central bank, and legislative bodies, with the strictness and final form remaining uncertain.

#韩国 #Digital Asset Basic Act