Min Byung-deok, a member of the Democratic Party, proposed the 'Digital Asset Basic Law' on the 10th, presenting an institutional turning point for the future of digital finance in South Korea. The bill, co-sponsored by a total of 30 lawmakers, emphasized that it would be a cornerstone for South Korea to leap forward as a leading country in the global digital economy.
Before proposing the bill, Rep. Min prepared an initial draft in early April and conducted three public reviews with experts from the industry, academia, and legal circles, and also reflected discussions from the digital asset committee during the presidential election campaign. He explained that it was a result of coordinating the voices of the innovative market.
Unifying Scattered Laws... Simultaneously Reorganizing Regulations and Promoting Industry
The Digital Asset Basic Law originated from the awareness that despite blockchain and AI-combined digital assets emerging as infrastructure connecting global capital markets and the real economy, there is no comprehensive law in Korea to systematically address this. The purpose is to clearly define the concepts of digital assets and digital asset industries, eliminate legal uncertainties, and enable industry players to operate their businesses stably.
Rep. Min stated that "digital assets are no longer an experimental means on the periphery, but the core infrastructure of the global economy where blockchain and artificial intelligence technologies converge." According to him, the global digital asset market size was approximately 2.5 trillion dollars (about 3,333 trillion won in Korean won) as of June 2025, growing more than threefold compared to 2020. While major countries like the United States, European Union, and Japan are leading the institutionalization of digital asset issuance, distribution, and trading, Korea remains at a stage-one level focused on asset protection.
Additionally, the bill was designed based on a framework that can absorb and integrate the existing Virtual Asset User Protection Act and the Special Financial Information Act. Rep. Min explained, "If this law passes, the existing Virtual Asset User Protection Act will become unnecessary, and the anti-money laundering provisions in the Special Financial Information Act can be integrated under this law."
From Defining Digital Assets to Classifying Business Rights... Presenting a Blueprint for Industry Design
First, it established clear definitions and application scope for digital assets and digital asset industries. Rep. Min said, "This bill adopted the term 'digital assets' instead of 'virtual assets'" and "We used the term 'digital assets' to avoid negative perceptions and clearly demonstrate its nature as an actual asset."
The bill defines digital assets as 'economic value digitally represented on a distributed ledger that can be traded or transferred', categorizing them into asset-linked digital assets (stablecoins) and general digital assets (meme coins, utility coins, etc.).
To issue digital assets in Korea, one must submit an issuance report to the Financial Services Commission and receive approval. Digital assets issued overseas without an issuer, like Bitcoin, are exempt from submission, but domestic exchanges must undergo a trading support review to list them. Rep. Min explained, "While it may seem disadvantageous to issuers in Korea, the FSC's approval can help ensure the credibility of the digital asset."
Digital asset industries were categorized into 10 business types with differentiated entry requirements such as authorization, registration, and reporting. Regarding the inclusion of 'other digital asset-related businesses', he stated, "Since digital asset industries are incredibly creative, new business types can emerge at any time, so we included a comprehensive clause."
No cross-business restrictions were imposed, allowing traditional financial institutions like banks and insurance companies, as well as platform companies and general enterprises, to engage in digital asset industries. The design allows for convergence with industries like gaming, culture, and agriculture.
Rep. Min pointed out, "Uncertain laws are the biggest obstacles to an industry" and "Industries cannot grow in an environment of fear of potentially going to jail." He added, "Digital asset industries are areas where creativity is key, and we must create an environment where the private sector can innovate freely based on predictability and system safety."
Specifying Self-Capital of 500 Million Won, Bankruptcy Preparation Requirements... Establishing Standards for Domestic Stablecoins
Secondly, a pre-approval system was introduced for asset-linked digital assets, or stablecoins. The bill defines these as 'digital assets linked to the value of Korean won or foreign currencies with guaranteed refundability'.
Issuance of asset-linked digital assets requires prior approval from the Financial Services Commission, with no restrictions on the issuer's form (such as corporations or non-profit organizations). Issuance requirements include being a corporation established in South Korea and having self-capital of at least 500 million won.
As refund guarantee is crucial, 'reserve funds' for investor protection are essential. The bill delegates reserve fund standards to presidential decree and includes a 'bankruptcy isolation' clause, ensuring that reserve funds remain protected even if the issuer goes bankrupt or enters rehabilitation procedures.
◎ Qualification Requirements for Asset-Linked Digital Asset Issuers
1. Must be a corporation established in South Korea
2. Have self-capital of at least 500 million won or the amount specified by presidential decree
3. Possess sufficient professional personnel and physical facilities as specified by presidential decree to perform business and protect users
4. Meet financial soundness criteria specified by presidential decree
5. Have a valid and appropriate plan for refund methods and reserve funds including matters specified by presidential decree
6. Have a valid and sound business plan
7. Executives must comply with Article 36
8. Major shareholders must have sufficient investment capacity, sound financial status, and social credibility as specified by presidential decree
Rep. Min's office explained that "digital assets have high system stability based on distributed ledger and a structure guaranteeing refunds through reserve funds, so the importance of self-capital is relatively low."
The Digital Asset Basic Law is evaluated as seeking a balance between regulation and innovation by lowering the entry threshold for issuers while maintaining key safety measures such as equity capital and reserve requirements, and bankruptcy isolation.
However, it is expected that there will be disagreements within the government regarding the lack of restrictions on issuers.
Kim Yong-beom, the policy chief of the Presidential Office, previously proposed a 'Korean Won Stablecoin Model' that included private fintech companies during his time as the representative of Hashed Open Research. However, Bank of Korea Governor Lee Chang-yong has expressed concerns, stating that "indiscriminate issuance by non-bank institutions could undermine the effectiveness of monetary policy".
'Policy by Government, Listing by Association'... Strengthening Industry Autonomy and Checks through Three-Axis Separation
Third, a 'Digital Asset Committee' directly under the President was established to enable strategic nurturing and policy coordination at the national level. This committee is designed to have more than two-thirds private members to ensure both policy consistency and private sector expertise.
Simultaneously, a permit, registration, and reporting system was introduced centered on the Financial Services Commission to clearly define entry barriers and establish operational principles and internal control standards to enhance the industry's soundness and transparency.
Additionally, a Digital Asset Industry Association was established as a self-regulatory body to perform functions such as transaction support, listing review, market monitoring, and unfair trading supervision. The member stated that this would "strengthen the industry's autonomy and responsibility and create a healthy ecosystem".
The member expressed expectations that the establishment of the Presidential 'Digital Asset Committee' would proceed quickly, noting that "the President is very interested in this field, and the policy chief has industry experience, so it can be pursued rapidly".
Regarding the Digital Asset Industry Association, he added that "the existing exchange consortium DAXA is exchange-focused and has potential conflicts of interest, so an association-centered listing eligibility evaluation and market monitoring function is necessary".
The functions of the Digital Asset Committee, Financial Services Commission, and Digital Asset Industry Association are divided into policy, supervision, and self-regulation. The member explained, "The Digital Asset Committee will coordinate policies directly under the President, the Financial Services Commission will handle permits and supervision, and the association will be responsible for listing reviews and supervision," adding that "with the separation of each institution's functions, effective system operation is possible within a system of checks and balances".
Furthermore, the bill strictly prohibits market-disrupting behaviors such as insider trading, market manipulation, and fraudulent transactions, enabling strong sanctions including fines and criminal penalties. It also specified protections tailored to the technology-based industry characteristics, such as designating a Chief Information Security Officer (CISO), controlling access channels, implementing anti-hacking measures, and mandating insurance or mutual aid.
The member stated that this bill aims not just to regulate but to make digital assets a new growth engine and protect financial sovereignty, pledging to create a won-based digital asset ecosystem and institutionally support private sector technological capabilities and innovation.
He emphasized, "This law is not mere regulation but a guardrail for industry growth," and "through regulatory clarification, we will secure leadership in the global digital asset market, protect citizens and investors, and strive to leap forward as a global G2 digital economy powerhouse".
