Democratic Party Digital Assets TF wraps up framework-law revisions… Policy Committee to take lead on legislation

The initiative for the second phase of legislative talks on the Digital Assets Framework Act is expected to shift to the Policy Committee of the Democratic Party of Korea.

According to the industry on the 4th, the party’s Digital Assets TF plans to deliver to the Policy Committee this week a consolidated proposal integrating digital-asset bills introduced by its lawmakers. After that, the bill is reportedly being shaped to be coordinated and formally introduced under the Policy Committee’s leadership rather than by the TF.

Still, observers say legislative friction will be unavoidable once the process reaches the Policy Committee stage. With Han Jeong-ae, chair of the party’s Policy Committee, reportedly aligning with the Financial Services Commission’s stance on limiting major shareholders’ stakes in digital-asset exchanges, a gap in tone is being detected from the TF’s internal position.

Previously, in a report to the Policy Committee on Jan. 29, the TF conveyed the view that the issue of restricting major shareholders’ stakes in exchanges should be deferred not to the framework law but to third-phase follow-up legislation. The TF explained that political considerations were at play: there are no comparable overseas legislative precedents and the measure could face constitutional challenges, potentially derailing enactment of the framework law itself.

By contrast, the FSC has maintained that major shareholders’ ownership in digital-asset exchanges should be capped at 15~20%, on par with the level applied to alternative trading systems (ATS). Industry players and TF members have taken reserved or opposing views on the regulation, raising the prospect of clashes during the Policy Committee’s coordination process.

The main structure of the TF’s consolidated proposal is also said to have been finalized. Stablecoin issuers would be limited to stock companies under the Commercial Act, and the issuer’s capital requirement would be set at 5 billion won. For overseas issuers, the proposal reportedly includes measures requiring them to come under the supervision and oversight of financial authorities by establishing domestic branches and the like.

After the bill is introduced, substantive discussions are expected to take place at the National Assembly’s Political Affairs Committee. With disagreements persisting within both ruling and opposition parties over the government’s proposal and continued pushback from the industry, the debate over the Digital Assets Framework Act is expected to face significant turbulence.