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Summary: South Korea Digital Asset Basic Act – A Radical Step to Crypto Regulation

South Korea puts forward Digital Asset Basic Act, the movement toward wide crypto regulation.
The bill will require licensing issuers of stablecoins of a minimum investment of 500 million won (368 thousand).
It is in tandem with the digital finance strategy of the president, Lee Jae-myung, that encourages a stable coin of won.
Introduces the blanket cryptocurrency regulation: definitions, trading regulations, and Digital Asset Committee.
Inspired by worldwide trends in the U.S, EU, Japan and Hong Kong.
Intends to safeguard investors, maintain stability, and put South Korea in the front line of digital finance around the world.

The Digital Asset Basic Act: What is the Digital Asset Basic Act?

Digital Asset Basic Act is the newest and most far-reaching legislation of crypto in South Korea.
It brings with it entire legal framework with an implication of everything on digital assets classification to practice and enforcement in the markets.
This new proposal is an extension of the Virtual Asset Investor Protection Act that commenced in July 2024 to provide strategic planning and legal infrastructure that can drive and develop the digital economy of the country.

“The Digital Asset Basic Act will become the foundation for Korea to lead in the global digital economy,” said Min during a press briefing.

One of the outstanding requirements is the issuers of the stable coin licenses.
Everybody who wants to issue stablecoins should now have at least 500 million won (about 368000 dollars) of capital.
This rule:
- Increases market and confidence.
- Restricts the usage of offshore stablecoins.
- Advocates a stablecoin system of Korean won, as part of the policy by President Lee Jae-myung.

The bill is a reflection of the same legislation in the EU, Hong Kong, Japan and US.
It corresponds to the design of the Hong Kong law on specific types of licenses to issue stablecoins.
The stablecoin regulation is also being propped by the proposed GENIUS Act in the U.S., which was championed by former President Donald Trump.
These international standards and practices will help South Korea to demonstrate its desire to become a competitive Asian and global digital finance one stop shop in the region.

Stablecoins are not the only stopping point of this bill. It also has the purpose of:
- Bring in legal definitions to digital assets.
- Design rules of issuance, trading and circulation.
- Establish Digital Asset Committee at the presidential level and govern strategically.
- Impose ban on malpractices in the market such as insider trading and manipulation.
Such structure provides transparency and assures protection of investors and sustainability in the market in the long run under the Act.

“This regulation is crucial to preserving economic sovereignty,” emphasized Min, who chaired the digital asset committee during Lee’s campaign.

Introduction of a sound regulatory framework has several advantages:
- Clearer and better protection to its investors.
- Exchanges and startups are run with the legal guarantee.
- Korea proclaims itself as the head of digital finance regulation in Asia.
With this law, innovation without anarchy can be a reality to local and overseas players.

Digital Asset Basic Act is not just another bill, but the South Korean economic leadership of the future when digital finance becomes a commonplace reality.
Nevertheless, it establishes a solid basis of cryptographic innovation, investor protection, and market development with:
- Clear licensing regulations
- Similarity with the entire world
- Sharp surveillance
With other countries trying to keep up with the race of regulating digital assets, South Korea has set itself squarely in the lead.