Kim Min-seok Pledges Push for Won Stablecoin, Tokenized Securities Framework

Former Prime Minister Kim Min-seok, a candidate in the Democratic Party's Aug. 17 convention for party leader, pledged to make the institutionalization of won stablecoins and tokenized securities a core part of his financial reform agenda. He also vowed to push for a Framework Act on Digital Assets and set up a special committee under the party leader to oversee related policy.

At a press conference at the National Assembly's communications hall on July 22, Kim laid out a "4+1 reform" plan that combines four major reform areas — finance, regional growth, the judiciary and the media — with constitutional revision. After prosecutorial reform, the country should concentrate its capabilities on livelihood-focused social reform that changes people's daily lives, he said, putting financial reform first on that list.

Kim said he would expand public-participation funds and adopt principles for regional investment. He also pledged to pursue a Framework Act on Digital Assets and establish legal frameworks for won stablecoins and tokenized securities. The plan calls for stronger policy finance for lower-income people and tighter financial consumer protection. To oversee the effort, he said he would establish a "Special Committee on Public Assets and Financial Innovation" directly under the party leader.

The proposed digital asset law would follow the Virtual Asset User Protection Act, which took effect in 2024. It would serve as a second-stage law covering virtual asset issuance, distribution and regulations governing market entry for service providers. Several bills are currently pending before the National Assembly's Political Affairs Committee. Differences over who should be allowed to issue won stablecoins, how reserve assets should be managed and how crypto exchanges should be governed have delayed work on a single bill.

The main issue in creating a framework for won stablecoins is the issuer. The Financial Services Commission and related agencies have been reviewing a plan to allow issuance mainly through consortia in which banks hold more than 50% of the equity, while also considering the scope of participation for non-bank fintech firms. The FSC discussed a bank-centered issuance model at a virtual asset committee meeting in February, but says nothing has been finalized. Minimum capital requirements for issuers, the composition of reserve assets and users' redemption rights also have yet to be set.

Tokenized securities are further along in implementation than in legislation. Amendments to the Electronic Securities Act and the Capital Markets Act, which allow securities issuance and distribution records to be created and managed using distributed ledger technology, passed the National Assembly plenary session in January and were promulgated in February. The revised laws are due to take effect next February. The FSC is operating a consultative body on tokenized securities to prepare detailed rules on issuer account management institutions, licensing requirements for over-the-counter brokerage businesses, investor protection and settlement infrastructure.