The ruling Democratic Party in South Korea presented the “Digital Asset Basic Law” bill to the public, which aims to create a new legal framework for digital assets. It is stated that in this new regulation, areas such as the issuance, buying-selling, storage and auditing of digital assets will be comprehensively addressed.
Prominent topics within the legal framework
According to the proposal, digital assets are defined as an important element that serves as a bridge between the real economy and financial markets. Under the new bill, assets whose value is determined based on real assets or currencies will be placed in a separate category. In order to issue these assets, prior permission will need to be obtained, reserve obligations will need to be provided and a repayment guarantee will be provided.
The regulation also includes the expectation that the experiences gained will move the country forward in the global financial order. According to the bill, organizations that want to offer such assets to the market will first have to obtain approval from the competent authorities. During the approval process, conditions such as minimum equity capital amount and operational capacity are requested to be met.
In addition, businesses operating in the digital asset market will be required to obtain a license, register and report. Companies providing trading, intermediary services, custody or consultancy will be required to fulfill these obligations.
Interinstitutional disputes and current steps
Negotiations on a similar law broke down in January. Differences of opinion among regulatory institutions were cited as the main reason for this. The Bank of Korea advocated that won-pegged stablecoins be issued only by banks with a majority stake. The Financial Services Commission, on the other hand, suggested that giving privileges to banks could hinder innovation.
With the new proposal, it is planned to establish an independent digital asset committee that will regulate the market. This committee will regulate sectoral policies and prepare national plans that direct the development of the sector.
On the same day, the Financial Services Commission and the Financial Supervisory Service announced new rules for stock exchanges. Accordingly, a uniform system will need to be used to delay withdrawals across all cryptocurrency exchanges in the country.
Authorities emphasize that the new regulation aims to prevent speed-oriented fraud attempts. It is aimed to prevent fraud cases made via phone, which have increased recently.
