Democratic Party to officially propose 'Stablecoin Bill' on the 28th

The Democratic Party of Korea is expected to propose the country's first stablecoin (a virtual asset pegged to fiat currency) bill on the 28th (Korea Standard Time). The institutionalization of stablecoins, one of President Jae-myung Lee's campaign promises, appears to be taking shape.

According to industry sources, Do-geol Ahn, a member of the National Assembly Planning and Finance Committee from the Democratic Party of Korea, plans to submit a bill titled 'Act on the Issuance and Distribution of Value-Stable Digital Assets' reflecting these contents. Value-stable digital assets refer to stablecoins. The bill governs the entire ecosystem of issuance, distribution, and control of Korean-won stablecoins, and has some distinctions from the 'Digital Asset Basic Act.'

The bill establishes an overall management system for stablecoins covering distribution, reserve assets, user protection, and monetary/foreign exchange policies. Specifically, stablecoin issuers must obtain pre-approval from the Financial Services Commission, and the qualifications include: ▲the entity must be a financial institution or a corporation under commercial law, ▲minimum capital of ₩5 billion, and ▲having IT infrastructure and dedicated personnel, among others.

In addition, the bill stipulates that stablecoins must be backed by at least 100% of the issued balance in highly liquid real assets, and reserves must consist of cash, demand deposits, government bonds, or local government bonds. Payment of interest on stablecoins is prohibited.

Furthermore, the bill includes user protection measures related to stablecoins. It requires that reserve assets for stablecoins be allocated with top priority to user redemption, and prohibits their use for seizure or collateral. Redemption must be processed within three business days by law, and exchanges must periodically evaluate the issuer's eligibility, disclosure status, and any legal violations before and after listing.