Democratic Party: “Digital Asset Framework Act to be introduced before the Lunar New Year holiday” … differences with the Bank of Korea persist

Bill to introduce Phase 2 digital-asset legislation, targeting before Lunar New Year

Stablecoin framework needs to narrow differences with the Bank of Korea

No agreement on “mandatory 51% bank stake”

Stablecoin issuer capital requirement: “at least KRW 5 billion”

The Democratic Party has set a goal of introducing Phase 2 digital-asset legislation no later than before the Lunar New Year holiday. However, major issues—including the issuance structure for stablecoins—are said to still show wide differences of opinion with the Bank of Korea. The party said it will do its utmost to coordinate disagreements among stakeholders, including the Financial Services Commission and the Bank of Korea, before the bill is introduced.

On the 8th, the party’s Digital Asset Task Force (TF) held a closed-door meeting at the National Assembly Members’ Office Building to discuss key issues in the Phase 2 digital-asset bill. The meeting focused on the division of roles with the Bank of Korea, how to establish a Digital Asset Committee, and requirements for stablecoin issuance.

Rep. Ahn Do-geol said in a briefing after the meeting, “The Phase 2 digital-asset bill is targeting introduction before the Lunar New Year,” adding, “At the TF level, we have finished organizing the issues, and based on that we will continue discussions with the policy committee chair and consultations with the government through to the end.”

The Phase 2 digital-asset law is an industry act that broadly covers the market, including issuance and disclosure of digital assets such as stablecoins (digital assets whose value is pegged to fiat currency) and regulation of exchanges. Legislative discussions began last year, but progress has been slow due to inter-agency differences over the bill’s core issue: the issuance structure for won-pegged stablecoins.

The meeting discussed how the Bank of Korea and the FSC would consult during the stablecoin issuance process. Rep. Lee Jung-moon, the TF chair, explained, “The Bank of Korea is calling for a unanimity rule in relation to approving stablecoin issuers, and discussions with the FSC are under way,” adding, “Many lawmakers formed a consensus that a consensus-based approach using the existing consultation procedures with the FSC is realistic.”

It was also reported that the parties still have not found common ground on the most contentious issue: the clause mandating a “51% bank stake” for stablecoin issuers. Rep. Lee Kang-il said, “On the ‘51% bank-stake consortium,’ neither side is in a position to concede, so it remains highly contentious,” adding, “One mediation proposal has been drafted and delivered to both sides.”

The minimum capital requirement, which serves as an entry barrier for issuers, is trending toward “at least KRW 5 billion.” Rep. Ahn said, “Many viewed a stablecoin issuer capital requirement of at least KRW 5 billion—similar to the level for electronic money businesses under the current Electronic Financial Transactions Act—as appropriate.”

In addition, the TF meeting reportedly discussed the name of the digital-asset bill, whether the Digital Asset Committee should be placed directly under the President, the creation of a new digital-asset consultative body, and the registration and licensing framework for digital-asset-related businesses.