Financial Services Commission to Convene Virtual Asset Committee Next Week… Aligning the Digital Asset Framework Act

South Korea’s financial authorities will convene the Virtual Asset Committee next week to gather final feedback on the government’s draft Digital Asset Framework Act. With the bill’s introduction seen as imminent, there is growing speculation that detailed contentious issues could be settled through discussions at the public-private advisory body.

According to the financial sector on the 27th, the Financial Services Commission (FSC) plans to hold a meeting of the Virtual Asset Committee on March 4. It will be the first meeting this year, with the Digital Asset Framework Act expected to be the key agenda item. Observers say the FSC is likely to listen to views from private-sector members based on the government draft it has prepared before finalizing the proposal. The Virtual Asset Committee is a statutory committee established under the Virtual Asset User Protection Act, and major policies must go through a prior consultation process before being finalized.

The meeting is expected to focus most heavily on limits on controlling shareholders’ stakes in exchanges. The FSC’s view is that because virtual asset exchanges serve as core distribution infrastructure, the market structure should be adjusted to reduce the ability of a small number of founders or specific shareholders to exert control. Accordingly, the FSC is reportedly reviewing a plan to cap controlling shareholders’ stakes at around 15–20%.

In addition, the meeting is expected to cover a range of detailed regulatory provisions that have seen relatively less discussion to date, including internal control systems and the issuance structure for won-denominated stablecoins.

Regarding the Digital Asset Framework Act, the government draft by the financial authorities and a compromise proposal being prepared by the Democratic Party of Korea’s Digital Assets Task Force (TF) differ on some issues. While coordination between the financial authorities and the party’s policy committee has progressed significantly, analysts say it remains unclear how much of the TF proposal will be reflected.