South Korea's Democratic Party Advances Comprehensive Digital Asset Basic Act for Stablecoin Regulation

Source: CryptoNewsNet Original Title: South Korea’s Democratic Party convene for comprehensive Digital Asset Basic Act draft Original Link: South Korea’s Democratic Party is advancing a comprehensive Digital Asset Basic Act to establish a regulatory framework for digital assets, including won-pegged stablecoins. This initiative comes after the party failed to reach an agreement with the Bank of Korea and the Financial Services Commission.

The Democratic Party’s Digital Asset Task Force held a closed-door meeting to debate the integrated bill. Key discussions centered on conflicting proposals regarding stablecoin issuance permissions and the structure of issuing institutions.

Legislative Challenges and Timeline

Lawmakers anticipate significant challenges before the integrated bill passes. The ruling and opposition parties must reach consensus, as the government’s proposal may differ in specifics from the ruling party’s position. According to Task Force Secretary Ahn Do-geol, the committee could proceed with a single measure if a solution is reached through discussions with the government.

Rep. Lee Jeong-mun, chair of the Digital Asset TF, noted that the schedule remains unclear due to disputes between the government and opposition parties. The party is creating its own bill to establish its stance through the Policy Council of Lawmakers. After the party decides on its position, high-level party-government consultations will be used to settle disagreements.

Lawmaker Jeong-mun pointed out that the government had been asked to present a plan since October of last year, but by the end of January, no answer had been received.

Integrated Legislation for Stablecoins

The Task Force is creating an “integrated legislation” that combines non-secured virtual asset regulation with stablecoin regulation in a single measure. Ahn Do-geol commented that “it is desirable to create a possible integration law and cover the entire ecosystem.”

However, if resolving all issues proves difficult within a short timeframe, the committee may consider processing stablecoins separately first to address legislative gaps amid rapidly expanding global stablecoin usage.

Regarding stablecoin issuers, TF members emphasized “supporting the industry,” which would create opportunities for both corporations and banks. Members agreed to focus on creative stablecoin development while promoting financial system stability.

Global Context

South Korea’s efforts to establish integrated legislation for stablecoins follow a global trend. Japan has already established a registration mechanism for stablecoin issuers, and the European Union’s Markets in Crypto-Assets (MiCA) regulation provides a comprehensive regional framework.