South Korea’s ruling Democratic Party has introduced a groundbreaking bill to legalize the issuance of stablecoins by local companies, marking a major step forward for the country’s digital asset sector.
The Digital Asset Basic Act, unveiled just days after President Lee Jae-myung’s election victory, aims to modernize South Korea’s crypto regulations and boost innovation in the industry.
Under the proposed legislation, domestic firms would be allowed to issue stablecoin digital tokens pegged to the Korean won if they meet a minimum capital requirement of 500 million won (about $367,000) and maintain sufficient reserves to guarantee redemption. The bill also mandates that all asset-linked tokens, including stablecoins, must receive approval from the Financial Services Commission, the nation’s top financial regulator.
To enhance transparency and competition, the bill proposes the establishment of a Presidential Digital Asset Committee to oversee policy and enforce new entry rules. Companies seeking to issue stablecoins or other digital tokens must obtain approval, register, and report their activities to the relevant authorities.
President Lee’s administration is moving quickly to fulfil campaign promises to strengthen South Korea’s digital asset framework. Lee has argued that a won-based stablecoin would help retain national wealth, reduce dependence on foreign stablecoins like USDT and USDC, and curb capital flight. Between January and March 2025, local exchanges experienced nearly $41 billion in outflows, primarily linked to foreign stablecoins.
However, the initiative faces resistance from the Bank of Korea, which warns that non-bank stablecoin issuers could undermine monetary policy. The central bank insists it should play a leading role in any won-pegged stablecoin project.
South Korea’s move comes as other major economies race to regulate stablecoins. Hong Kong’s new stablecoin law takes effect in August, while the U.S. Congress is debating its legislation. As global banks and financial institutions explore the adoption of stablecoins, South Korea’s proposed bill could position the country as a leader in digital asset regulation.
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