What to Know
- Stablecoin issuers in South Korea must now have at least 5 billion KRW ($3.5M) in capital to operate.
- A Virtual Asset Committee will be created to respond quickly to hacks, system failures, and market crises.
- The new law may also limit major ownership in crypto exchanges to reduce control by a few large holders.
South Korea is preparing to bring stronger structure and safety to its crypto market with a new law called the Digital Asset Basic Law. The Democratic Party has finalized the bill and plans to submit it for review before the Lunar New Year holiday. The law aims to create clear rules, improve user protection, and make the digital asset market more stable and trustworthy.
$3.5 Million Entry Rule
One of the most important parts of the new law is a financial requirement for stablecoin companies. Any company that wants to issue a stablecoin in South Korea must have at least 5 billion Korean won in legal capital, which is about $3.5 million.
This rule means that only well-funded and financially stable companies will be allowed to issue stablecoins. Lawmakers say this is needed to protect users and prevent weak or risky projects from entering the market. Since stablecoins work like digital money, the government believes they should follow the same standards as electronic money companies, which already face similar rules.
Why Stablecoins Are Being Treated More Strictly
Stablecoins are digital coins linked to real-world money such as the Korean won or the US dollar. They are commonly used for payments, transfers, and trading because their value is meant to stay stable. However, regulators fear that if stablecoins are not controlled properly, they could be used for illegal activities, fraud, and hidden money movement. This is why Korea is choosing a more careful approach, focusing on strong financial backing and strict oversight.
The new law will also create a Virtual Asset Committee (also called the Virtual Asset Council). This body will be led by the head of the Financial Services Commission (FSC) and will include senior officials from the Bank of Korea and the Ministry of Economy and Finance. This group will act as a fast-response team. If there is a major hack, system failure, or market crisis, the committee will be able to respond quickly. The goal is to stop panic, reduce damage, and protect users before problems spread across the market.
Central Bank Pushes for a Conservative Approach
Two days ago, during Hong Kong’s Asia Financial Forum today, Bank of Korea Governor Rhee Chang Yong discussed the potential issuance of stablecoins in Korea. The Governor explained that his reasons for requiring bank involvement are based on several factors. He believes the most likely use case for Korean won stablecoins is for cross-border usage, but Korea still has capital flow management measures.
Governor Rhee’s comments painted a view that a large proportion of stablecoin usage in Asia aims to hide identities. Hence, he is concerned that without bank involvement, KYC and AML requirements will not be applied appropriately.
“So we want to have a more conservative approach,” said Governor Rhee. “We want to allow the Korean won stablecoin issuance, but let’s start with the bank-led institutions. But the market cries that the non-bank has to be allowed.”
Final Thoughts
The Digital Asset Basic Law is not just about stablecoins. It also plans to change how crypto exchanges are run in South Korea. Regulators are reviewing a rule that would limit major shareholders from owning more than 15% to 20% of an exchange. The idea is to prevent too much power from being held by a small group of people.
The government believes large exchanges now play a role similar to public financial systems, so they should follow stricter governance rules. This proposal has faced resistance from big exchanges like Upbit, Bithumb, and Coinone, where founders and early investors currently hold much larger shares.
Together, these changes show that South Korea is moving toward a strong, controlled, and regulated crypto system. The Digital Asset Basic Law aims to make crypto safer, more stable, and more trusted by the public.
