South Korea has moved to accelerate work on its Digital Asset Framework Act, with Financial Services Commission Chairman Kim Byoung-hwan saying the government will step up consultations as lawmakers press for the legislation to be completed this fall.
What the Framework Covers
The proposed law forms the second phase of South Korea's virtual-asset regulatory framework and is expected to set rules covering stablecoin issuance, virtual asset service providers, disclosures, internal controls and other parts of the domestic crypto market. Kim made the comments during a plenary meeting of the National Assembly's Political Affairs Committee on Aug. 24, after Democratic Party lawmaker Lee Kang-il questioned when the government would submit its own version of the bill.
When Lee asked whether the government could complete its work in time for legislation during the fall session rather than letting the process move into next year, Kim said he would do his best to speed up discussions. He did not provide a firm submission date.
Pressure to Keep Pace With the U.S.
Lee pressed the FSC to move faster, arguing that South Korea risks falling behind other major financial markets while its government proposal remains unfinished. He pointed to regulatory work underway in the United States, where the SEC has been clarifying the treatment of digital assets by separating them into categories including commodities, securities and stablecoins.
Lee also cited developments at the CFTC involving perpetual futures linked to Bitcoin spot prices and the potential use of qualifying digital assets and stablecoins as collateral in derivatives markets. The digital-asset market has moved beyond simple coin trading and into the financial system, Lee said during the meeting.
Stablecoin Rules at the Center
Stablecoins are expected to take a prominent place in the second-stage legislation as regulators work through questions over who should be permitted to issue won-denominated tokens and how issuers should be supervised. The Bank of Korea has backed a bank-led model for won stablecoins, arguing that banks should take the leading role during early issuance because of possible effects on payments, monetary policy and financial stability.
Government agencies have spent months discussing the structure of a domestic stablecoin framework, including licensing, reserve requirements and the roles of banks and non-bank companies. Regulators and lawmakers have disagreed over issues including issuance eligibility, reserve supervision and the division of authority between financial agencies.
VASP Licensing and ETF Rules
South Korea has already revised its Foreign Exchange Transactions Act to bring cross-border virtual-asset transfers under a formal regulatory regime, with the amended law taking effect in December. Authorities have also been examining spot cryptocurrency ETFs as part of their work on bringing more digital-asset products under existing financial regulation.
As many as 10 pending digital-asset bills could be combined into a government and ruling-party package during 2026, creating what would be the country's most comprehensive crypto regulatory framework to date.
