South Korea's financial regulators met with the ruling Democratic Party on Sunday to present the government's draft of the Basic Digital Asset Act, the second phase of the country's cryptocurrency legislation. The meeting, held at the National Assembly, comes just days after authorities jointly announced a broader roadmap for won-backed stablecoins, central bank digital currency (CBDC) pilots, and foreign exchange modernization.
Financial Services Commission (FSC) Chairman Lee Eog-weon and Financial Supervisory Service (FSS) Governor Lee Chan-jin attended the briefing, alongside lawmakers from the Democratic Party's National Policy Committee. At the core of the discussion were two contentious provisions: a mandate for a bank-led consortium to issue won-based stablecoins and potential caps on major shareholders' stakes in cryptocurrency exchanges.
The bank-led stablecoin requirement aims to bolster financial stability and consumer protection by tying stablecoin issuers to traditional banking oversight. However, critics warn it could create high entry barriers for fintech firms and stifle innovation. Exchange ownership caps, meanwhile, seek to prevent market concentration but have raised concerns about discouraging investment and complicating governance at major trading platforms.
An official from the ruling party’s Political Affairs Committee indicated that compromise proposals are already being discussed, and that the government draft must be released by early August to pass into law within the year. This timeline underlines the urgency as South Korea, one of the world's most active crypto markets, moves to establish comprehensive rules for digital asset issuance, listing, custody, and stablecoins.
The broader roadmap, unveiled on July 19 by the FSC, Bank of Korea, FSS, and Korea Securities Depository, also includes plans to make the won a freely convertible currency and to ease cross-border capital rules. The Bank of Korea will expand pilots linking an institutional CBDC with tokenized government bonds and participate in the BIS's Project Agora for cross-border payments. Deposit tokens—blockchain-based representations of commercial bank deposits—will see use cases in government subsidies, public vouchers, and EV charging payments.
Foreign exchange reforms include establishing an offshore won settlement network, allowing foreign institutions to hold and settle won without opening domestic accounts, and shifting from a prior-approval to a post-reporting system for capital transactions. These measures are designed to align the financial system with the international use of digital assets, including the anticipated won-backed stablecoins.
