South Korea Sets $3.5M Capital Requirement for Stablecoin Issuers

South Korea is moving closer to clear rules for digital assets. The ruling Democratic Party has finalized a new bill called the “Digital Asset Basic Law.” The party plans to submit it before the Lunar New Year holiday. The law focuses on stablecoins and market safety. One key rule stands out. Stablecoin issuers must hold at least 5 billion won in capital. This equals about $3.5 million. Lawmakers say this will make issuers more reliable and protect users.

New Capital Rule for Stablecoin Issuers

Under the draft law, any company that issues stablecoins must meet the capital threshold. The level matches the rule used for electronic money firms in South Korea today. Lawmakers say stablecoins act like digital cash. Because of this, they need similar safeguards. The goal is to stop weak firms from issuing tokens without enough financial backing.

This rule also aims to prevent sudden failures. If an issuer collapses, users could lose money. With higher capital, firms should be able to absorb losses and manage risks better. Though the government hopes only serious and well funded players will enter the market.

Virtual Asset Committee to Handle Crises

The bill also creates a new body called the “Virtual Asset Committee.” The Financial Services Commission chair will lead it. Other members will include the Bank of Korea’s deputy governor and a vice minister from the Ministry of Economy and Finance.

This group will act fast during crises. It will respond to hacks, system failures and large market shocks. In the past, agencies worked slowly and separately. Now, the government wants one team to act together. Officials say this will help reduce damage when problems appear in crypto markets.

Stablecoins, CBDCs, and Control Risks

The Bank of Korea still has concerns. Governor Lee Chang-yong has warned that stablecoins could be used to move money across borders too easily. He said this could weaken capital controls. The risk is higher if won nbased stablecoins link with U.S. dollar stablecoins. In that case, money could flow out of the country fast during market stress.

Because of this, the new law does not fully loosen control. Instead, it keeps a registration and approval system. High risk sectors will need direct authorization. Lower risk sectors will only need registration. This creates a two-track system. The government says this keeps space for innovation but still protects users.

What This Means for Korea’s Crypto Market

This bill shows that South Korea wants order, not chaos, in crypto. It doesn’t ban stablecoins. Instead, it sets clear rules. The capital rule could push out small or weak projects. At the same time, it may attract large firms and banks.

The law also supports long term planning. Officials want digital assets to grow under supervision. They want to avoid crashes like those seen in past years. For users, this could mean safer stablecoins. For companies, it means higher costs to enter the market.

If passed, the Digital Asset Basic Law will mark a new phase for South Korea’s crypto policy. The country is shifting from loose guidance to firm structure. Stablecoins will face higher barriers. But they will also gain legal status. This balance may shape how Asia’s fourth-largest economy handles digital money in the years ahead.

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