South Korea Unites Crypto Regulations in Single Framework Push

South Korea is taking steps to consolidate its crypto and stablecoin regulations into a single framework. The Financial Services Commission (FSC) announced that it will prepare a government-backed Digital Asset Basic Act, which will combine 10 separate bills currently pending in the National Assembly.

The proposed bill aims to cover three key areas: the digital asset industry, market, and users. For the industry, the FSC plans to define digital asset businesses, set conduct rules, and create a legal framework for stablecoin issuance and distribution. The bill also includes clearer exchange entry requirements and disclosure rules for digital asset issuance and distribution.

User protection will be a major part of the framework, with strengthened internal controls and IT stability at levels similar to those required of financial institutions. FSC Chairman Lee Won-geon stated that the goal is to build a digital asset ecosystem where 'innovation and stability are in balance.'

The biggest challenge facing the FSC is determining who will be allowed to issue stablecoins, with proposals including a 51% rule requiring banks to control at least 51% of a consortium issuing Korean won stablecoins. The FSC has not yet made its government draft public, so the final details could still change.