South Korea has just made a major move in the global race to regulate digital assets. On June 10, the ruling Democratic Party, led by newly elected President Lee Jae-myung, introduced landmark legislation that could transform the nation’s financial landscape named the Digital Asset Basic Act. This bill, if passed, will allow local companies to issue stablecoins under a strong regulatory framework.

A Campaign Promise Delivered

President Lee Jae-myung, who secured victory in the June 3 snap election, wasted no time in acting on one of his most prominent campaign pledges: to legalize and regulate stablecoins in South Korea. Lee’s administration argues that a won-backed stablecoin market is crucial to prevent national wealth from leaking overseas and to ensure South Korea stays competitive in the rapidly evolving digital economy.

Key Features of the Digital Asset Basic Act

The proposed bill sets clear conditions for stablecoin issuance:

1. Minimum Capital Requirement: Companies wishing to issue stablecoins must have at least 500 million won (about $368,000) in equity capital.

2. Regulatory Approval: Issuers must obtain approval from the Financial Services Commission, South Korea’s top financial regulator.

3. Reserve Management: Firms are required to maintain sufficient reserves to guarantee refunds and protect customer funds, even in the event of insolvency.

4. Open to More Players: Not just banks, but fintech and private financial companies can participate, broadening the competitive landscape.

The legislation also proposes the creation of a Digital Asset Committee under the President’s office to coordinate national policy, and a Digital Asset Industry Association to monitor market practices and oversee token listings.

A Booming Crypto Market

South Korea is already a crypto powerhouse. According to the Bank of Korea, trading in US dollar stablecoins on the country’s five main exchanges hit 57 trillion won ($42 billion) in the first quarter of 2025 alone. More than a third of the population are active participants in the crypto market.

The new bill aims to channel this energy into a regulated, transparent environment, boosting investor confidence and encouraging further innovation.

Global Context

South Korea’s move puts it ahead of many major economies, including the US, where stablecoin legislation like the GENIUS Act remains stalled. Lawmaker Min Byeong-deok, who spearheaded the bill, highlighted the urgency of establishing a domestic stablecoin framework to counter the dominance of US dollar-backed tokens such as USDC and USDT.

Challenges and Next Steps

While the bill has been welcomed by many in the tech and finance sectors, it faces scrutiny from the Bank of Korea, which has raised concerns about the potential impact of non-bank stablecoins on monetary policy. The scars of the 2022 Terra stablecoin collapse, co-created by a South Korean, still linger in the national memory.

Nonetheless, the momentum is undeniable. Shares of local crypto-related companies, such as KakaoPay, have surged in anticipation of the new regulatory environment, though some analysts urge caution about the long-term benefits.

Final Thoughts

South Korea’s Digital Asset Basic Act signals a new era for the country’s digital economy. By legalizing and regulating stablecoins, President Lee’s administration is betting big on transparency, innovation, and global leadership. As the bill moves through parliament, the world will be watching to see if South Korea can set the standard for crypto regulation in the 21st century.