In June 2025, South Korean President Lee Jae-myung swiftly implemented his electoral promises by initiating the reform of cryptocurrency legislation. This event marks a significant step for the local financial market.
Overview of the Basic Digital Assets Act
In early June, South Korea's ruling Democratic Party submitted the draft of the Basic Digital Assets Act to the National Assembly. The document proposes the legalization of KRW-backed stablecoins, with clear capital requirements and regulatory procedures.
Analysis of Key Highlights of the Act
1. Setting a minimum capital requirement of KRW 500 million for stablecoin issuers. 2. Reserve requirements and redemption guarantees to prevent financial disasters. 3. An approval system by the Financial Services Commission (FSC) creating barriers to market entry. 4. Allowing stablecoins for local payments and settlements. 5. Potential integration with ETFs and pension funds.
Market Reactions to the Changes
Following announcements of the initiatives, South Korea's crypto-related stocks saw a surge. However, analysts warn of the need for monitoring the government's next steps and the central bank's reactions to the new initiatives.
The reform of cryptocurrency legislation in South Korea under President Lee Jae-myung’s guidance could lead to significant changes in the country's financial ecosystem. The question of readiness for such a shift remains open.
