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- South Korea plans strict trust custody rules for real-world asset tokens.
- Stablecoins gain legal status as payment tools under foreign exchange law.
- New draft sets the base for a full digital asset regulatory framework.
South Korea is advancing toward a structured crypto and digital asset system. The Democratic Party of Korea has introduced a draft plan that brings real-world assets, stablecoins, and broader crypto activities under formal regulation. This move reflects a shift from fragmented oversight to a unified legal approach.
It also aligns digital finance with existing financial laws and strengthens institutional control. The proposed Framework Act on Digital Assets sets clear conditions for issuing real-world asset tokens. It requires issuers to hold underlying assets in managed trusts under the Capital Markets Act. This rule ensures that each token has verified backing.
It also reduces risks linked to unverified or mismanaged assets. Real-world assets include tokenized securities and other financial instruments. These assets range from government bonds to asset-backed loans. Blockchain technology converts them into digital tokens for trading and investment. The new framework removes uncertainty that previously limited growth in this sector.
Adaptive Approach to Crypto Market Changes
Presidential decrees will establish detailed requirements. This is important due to the need for regulation based on the development of the market. Moreover, the trust mechanism helps increase investment activity and attract institutions to the market.
Stablecoins will be classified as payment tools involved in foreign exchange operations, according to the draft law. In this way, stablecoins become subject to the regulation provided for by the Foreign Exchange Transactions Act.
The regulation will automatically include companies that work with such assets. There will be no restrictions regarding small transactions made using stablecoins. Thus, users can make regular purchases of products and services.
In addition, regulators will monitor large transactions to restrict money flow. Issuers of stablecoins are prohibited from offering any payments in return. This measure prevents possible risks for both participants and regulators. The prohibition also affects yield models built on the use of stablecoins.
Focus on Strong Blockchain Infrastructure
This draft underlines the importance of technical infrastructure development. It mandates that the Financial Services Commission should establish interoperability rules for the blockchains. This measure will prevent the fragmentation of liquidity across networks. It will help to facilitate the transaction process in the digital asset market.
In addition, this initiative proposes creating one unified system of disclosure. Digital Asset Industry Association will be responsible for implementing this system. This will ensure the end of dispersed disclosures from different exchanges and will provide a standardized set of data for the investors.
Nevertheless, there are still certain unresolved questions. These include such aspects as restrictions on share ownership in exchanges, as well as banking conditions for stablecoin issuers. In the meantime, the presented regulation is just a step forward to addressing these questions.
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