South Korea’s FSC Restarts Digital Asset Framework Push, Targets September Bill

South Korea’s Financial Services Commission has resumed work on the Digital Asset Basic Act, the second phase of the country’s virtual-asset legislation, and is considering having the government draft introduced as a lawmaker-sponsored bill.

The FSC held private talks in late July with Yoo Dong-soo, chairman of the National Assembly’s Political Affairs Committee, and Democratic Party lawmaker Park Sang-hyuk on the direction of the bill, Yonhap Infomax reported on Aug. 13. The discussions covered the bill’s main provisions, who would formally sponsor it, the timetable and how to coordinate views within the ruling party.

The FSC is weighing a lawmaker-sponsored route instead of formal government legislation. A government bill takes longer because it must pass review by the Ministry of Government Legislation and approval at a Cabinet meeting, while a bill introduced by a lawmaker can move faster. Officials are primarily considering having Yoo introduce the government draft under his name, the report said.

The government and the ruling party are aiming to introduce the bill in September. Their plan is to submit it before the annual parliamentary audit and begin a full review during the regular National Assembly session in September.

Even after the bill is submitted, it will have to be reviewed together with existing proposals from lawmakers. More than 10 bills, including the Digital Asset Basic Act and stablecoin-related measures, are pending before the Political Affairs Committee’s subcommittee on bill review.

The key issues are who would be allowed to issue stablecoins and whether to restrict controlling shareholders’ stakes in virtual-asset service providers. Differences reportedly persist within the ruling party over whether such ownership rules are necessary and how strict they should be.

The timetable for the Digital Asset Basic Act could still slip because the FSC’s top legislative priority for the regular session is an amendment to the Capital Markets Act. Regulators are first pushing to establish emergency intervention powers in response to the recent single-stock leveraged ETF issue.