South Korea Nears Digital Asset Act Completion After Breakthrough on Won-Based Stablecoin Rules

South Korea plans to wrap up stablecoin rules in January as lawmakers agree on a bank-led consortium model for issuance.

The new act sets clear oversight for digital assets and strengthens rules for foreign stablecoins that dominate local trading.

Lawmakers also push security and capital market reforms to improve investor protection and support market transparency.

South Korea is moving to finalize a new digital asset act by January after lawmakers agreed on a stablecoin framework that had delayed progress for months. They met behind closed doors and resolved a key dispute on who can issue won-based stablecoins. The decision now clears the path for a broader digital asset overhaul.

Lawmakers Back Consortium Model for Won-Based Stablecoins

Lawmakers agreed on a consortium model that gives banks a majority stake in stablecoin issuance while allowing involvement from major tech firms. This approach aims to support the Bank of Korea’s focus on monetary stability. It also creates room for private sector innovation in the growing stablecoin market. The plan forms the basis for a Korean-style stablecoin with strict rules on reserves and issuance. Officials see this model as a balanced way to protect consumers and reduce market risks.

The agreement also helps the government align domestic rules with global standards. Markets in the U.S., EU, and Japan strengthened stablecoin oversight this year. Korean regulators want to avoid delays that could disadvantage local firms in a fast-moving sector.

Government Faces Tight Deadline for Full Proposal

The government must submit its proposal for the digital asset act by December 10. Lawmakers plan to advance their own bill if the government misses the deadline. The target is to pass the act during the National Assembly’s January session. The bill will build on the Digital Asset Basic Act, which set licensing rules for issuers and required firms to protect reserves. It also created compliance obligations for virtual asset service providers.

The new act aims to close major regulatory gaps by treating digital assets more like traditional financial products. It will also set clearer rules for foreign stablecoins that dominate Korea’s trading activity. This includes assets such as USDT and USDC, which continue to hold a large share of the market. Regulators want clear oversight before these assets expand further into local payment flows.

Korea’s crypto adoption continues to grow across people aged 20 to 50. Regulators see timely action as essential. Slow progress has raised concerns that Korean firms could fall behind competitors in advanced markets.

Reforms Extend to Security and Capital Markets

Lawmakers also reviewed separate reforms on financial security and market transparency. They plan to revise the Electronic Financial Transactions Act after several major hacking incidents. The updated rules will introduce stronger penalties and tighter enforcement to improve sector resilience.

Officials also discussed capital-market reforms that aim to improve fairness. The proposals include mandatory tender offers in specific corporate situations. They also include updates on share allocation rules to give retail investors better access during public offerings.