South Korea's Digital Asset Law Struggles to Gain Momentum

The South Korean government has set an ambitious goal to pass a comprehensive digital asset law by year's end, but experts are skeptical about its chances of success. The Digital Asset Basic Act aims to consolidate 10 separate crypto-related bills into one integrated framework, defining what constitutes a digital asset business and setting entry requirements for exchanges.

The proposed act would also mandate disclosure systems for token issuance and distribution, impose financial-sector-level internal controls on operators, and create a legal regime for won-denominated stablecoins from scratch. However, two crucial provisions remain unresolved: the '51 percent rule,' which would require stablecoin issuers to be structured as bank-led consortia, and an ownership cap of 15-20% for major exchanges.

These provisions are critical to determining whether South Korea's stablecoin ecosystem will be integrated with its banking sector or operate independently. The government has completed a draft but has not released the details, leaving many in the industry uncertain about what to expect.