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Bloomberg has reported that the South Korea Democratic Party has suggested a Digital Asset Basic Act, which would allow domestically incorporated firms to issue knock-down fiat-backed stablecoins with strict regulation.
The bill, which has the support of South Korea’s president, requires a Myanmar-type first-round effort area of 500 million KRW (about $370,000) and a reduction in reserves to protect recoveries.
Applications for the projects should be reviewed by the recently created Presidential Committee on the 4th Industrial Revolution and the Presidential Digital Asset Committee, and the FSC has to give its approval to all asset-backed cryptocurrency tokens.
The South Korea Democratic Party reportedly still draws support for planned digital asset cultivation and not a digital currency ban, and there should be transparency and investor protection. Shares in blockchain-related companies, including KakaoPay, surged after the announcement, as market confidence in the arena was buoyed anew by the administration’s crypto-friendly approach.
South Korea Central Bank Flags Stablecoin Risks to Monetary Policy
The Bank of Korea sounded a cautious note even as the industry rejoiced. Private issuance of stablecoins might get in the way of monetary policy, according to Governor Rhee Chang-yong. The central bank says any digital currency linked to the won should be under its control.
This stance is causing friction as the South Korea Democratic Party and the president of South Korea lean towards supervised private issuance.
Global Regulatory Parallels
The South Korea Democratic Party template follows suit with other major economies. Hong Kong is set to introduce fiat-pegged tokens regulation on August 1. In the meantime, the U.S. is inching closer to enacting the “Genius Act” for stablecoin regulation.
And some of the biggest players in the stablecoin game are still seeking to forge a path forward, efforts lauded by South Korea’s president as an international endorsement of proposed legislation.
Present Stablecoin Market Data
As of June 10, 2025, Tether (USDT) is trading at $1.0001, with a 24-hour trading range of $0.9999–$1.0003. USD Coin (USDC) is flat at $1.0002 (24-h range $0.9998–$1.0004).
Six-Month Forecast:
- USDT: $1.0000 ± 0.005
- USDC: $1.0001 ± 0.005
One-Year Forecast:
- Both pegged within $1.0000 ± 0.01
Reserve is a robust compliance framework, encouraged by the South Korea Democratic Party and supported by South Korea’s president, that provides stability for your stablecoin.
On-chain developments in South Korea
2505Q1 saw local crypto transactions, seemingly by retail, at ₩57 trillion (~$43 billion), almost half of all outflows. And inflows are on a par with outflows at ₩27 trillion, which means more people are buying the contract and there’s minimal liquidity.
More than 16 million people, or about 31 percent of the population, now invest through Korean exchanges. Financials indicate that the South Korea Democratic Party and South Korea’s president are riding on this wave to regulate and make the market official.
Community Discussion & Social Media Buzz
The subreddit and X activity increased massively since SouthKoreaDemocraticParty submitted its motion. Members of the Reddit community were cautiously optimistic:
“One type of regulated, won-backed stablecoin with redemption will recover trust,”
one user wrote.
On X, several finance influencers pointed out the congruence of South Korea’s SouthKorea’sPresident’s election slogan with real policy actions.
Crypto What’s in Store for the South Korean Crypto Market
Final Action: The bill will go to parliament as the South Korea Democratic Party tries to drum up wide support. Committee Kickoff: Upon approval, the Presidential Digital Asset Committee will initialize and make use of the South Korean President’s regulatory roadmap.
Central bank negotiations: The Bank of Korea and the South Korea SouthKoreaDemocraticParty are expected to influence the definition of jurisdiction through the exchange of significant implications.
Editorial Summary
The proposed law from the South Korea The South Korea Democratic Party and its leader, South Korea’s president, are paving the way for won-backed, regulated stablecoins in the country. Market responses have been intense; regulatory oversight is still being negotiated.
In a shift towards transparent regulation, growing on-chain, and public support, the country is attempting to incorporate digital assets into its existing financial infrastructure, which may one day become a model for other nations to follow.
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Frequently Asked Questions
What is the main purpose of South Korea’s Digital Asset Basic Act?
It permits a controlled issuance of stablecoins by companies with enough underlying capital and reserves and aims for better regulated transparency, investor protection, and innovation under official supervision.
How would the new proposal regulate stablecoin issuance?
A presidential committee for the Fourth Industrial Revolution will supervise the policy, and the Financial Services Commission will ensure that asset-linked tokens are public after companies that are special for public offerings.
Why is the president of South Korea backing stablecoin development?
The President of South Korea, for his part, considers stablecoins important to modern finance, with the right level of regulation ensuring safe innovation, market development, and enhanced investor protection.
What are the primary issues raised by South Korea’s central bank?
The Bank of Korea cautions that non-bank stablecoins could disrupt monetary control and calls for state control of any digital currency linked to the Korean won.
Glossary of Key Terms
1. Stablecoin
A cryptocurrency fixed to a stable asset (e.g., a fiat currency such as the KRW or USD) to reduce the volatility of the price in digital transactions.
2. Digital Asset Basic Act
A draft legislation by the South Korea Democratic Party for local companies to create stablecoins and to establish supervision and control systems for digital assets.
3. Won-Pegged Stablecoin
A South Korean won-denominated stablecoin providing digital stability to the Korean-regulated financial environment.
4. The Presidential Digital Asset Committee
Intended supervisory committee to guide crypto policy in South Korea under the jurisdiction of South Korea’s president, overseeing the balance between innovation and regulation.
5. FSC: The Financial Services Commission
South Korea’s leading financial watchdog overseeing the licensing, authorization, and supervision of asset-linked tokens, including stablecoins, under the Digital Asset Basic Act.
6. Asset-Linked Tokens
Digital coins that are paired with, or backed by, other assets in the real world, like fiat money, also require approval by a regulator for use in South Korea.
7. Reserve Requirement, also known as the Capital Reserve Requirement
A financial regulation stipulation whereby stablecoin originators would need to maintain a minimum of over 500M KRW, which aligns with investor protection and liquidity.
8. Monetary Policy Risk
Concerns about potential interference with a central bank’s capacity to manage inflation, interest rates, or currency stability, as mentioned by the Bank of Korea in relation to private stablecoins.
