South Korea revives its stalled crypto law

Talks resume after months on ice

Seoul is back at the table. South Korea has resumed efforts to advance its second-phase virtual asset legislation after a four-month pause, with financial authorities and lawmakers restarting discussions on the Digital Asset Basic Act and the government aiming to complete the legislation within the year. The move follows the suspension of a planned party-government consultation process in March, which delayed efforts to finalize the proposed framework.

On July 20, the ruling Democratic Party of Korea held a closed-door briefing with the Financial Services Commission (FSC) at the National Assembly Members' Office Building in Yeouido, Seoul, agreeing to accelerate the Framework Act on Digital Assets, the Phase 2 legislation that would legalize and regulate won-denominated stablecoins. By committing to hold subcommittee meetings of the National Assembly's Political Affairs Committee twice a month, the party signaled that the bill will now be pushed on a faster, more disciplined schedule.

South Korea has roughly 9.7 million crypto investors and daily exchange volumes that can exceed 11 trillion won ($7.9 billion), giving the legislation significant economic weight. Ten digital asset and stablecoin bills are already pending in the National Assembly, introduced by lawmakers from both the ruling Democratic Party and the opposition People Power Party.

Two fights still to resolve

The Digital Asset Basic Act focuses on two major areas: establishing mandatory bank-centered won stablecoin consortiums and setting limits on the ownership structure of major cryptocurrency exchanges.

On stablecoins, the battle lines are drawn between regulators. The Bank of Korea wants stablecoin issuance limited to bank-led consortia with 51% bank ownership, while the Financial Services Commission argues that rule would suppress innovation. The central bank's rationale is risk containment: by anchoring issuance within the regulated banking sector, authorities aim to prevent stablecoins from eroding monetary policy effectiveness or creating backdoor channels around foreign exchange controls. A more detailed compromise has been floated. Democratic Party lawmaker Ahn Do-geol has proposed a governance model requiring fintech firms to hold a 34% stake with management rights while a consortium of banks retains over 50% ownership to ensure solvency and compliance.

The second sticking point is exchange ownership. Lawmakers are debating whether to uniformly apply 15 to 20% equity ownership regulations to virtual asset exchanges, including Dunamu (Upbit's operator), Bithumb, Coinone, Korbit, and Gopax. The National Assembly Research Service reportedly reviewed the ownership cap twice and suggested the measure could face constitutional concerns. Industry groups including the Digital Asset Exchange Alliance have opposed the caps, warning that artificially changing private ownership structures would undermine domestic market development.

The government's 2026 Economic Growth Strategy, announced on July 14, committed to enacting the Framework Act in the second half of the year to segment the digital asset industry, establish business-conduct rules, and build a legal foundation for stablecoins. To hit that target, the bill needs to clear committee and reach the floor before the August recess. Industry participants remain cautious after previous attempts to move the bill forward failed to reach the final stages.

Sources:
Crypto Times: South Korea Targets September for Won Stablecoin Bill
Coin Edition: South Korea Restarts Digital Asset Law Discussions
Cryptopolitan: South Korea Delays Digital Asset Basic Act