The South Korean regulatory body, the Financial Services Commission (FSC), is developing legislation to govern stablecoins that are pegged to the Korean won.
Reports indicate that the proposed law is scheduled to be presented to the National Assembly in October. This initiative forms part of the second phase of the Virtual Asset User Protection Act, according to insights from MoneyToday, a local news source.
The FSC has been actively constructing this regulatory structure through its dedicated virtual asset committee since 2023.
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The forthcoming regulations are anticipated to specify standards for the issuing of stablecoins, the methods of collateral management, and the essential operational monitoring systems for service providers.
Park Min-kyu, a representative from the Democratic Party, mentioned receiving information regarding the direction of the proposed regulatory framework. He stated:
The government’s planned legislation is projected to be formally presented to the National Assembly around October.
There is growing momentum behind the creation of a stablecoin supported by the Korean won. Former presidential candidate Lee Jae-myung advocated for this concept during his campaign, and numerous legislators have already submitted related proposals.
These proposals encompass the Digital Asset Basic Act from Representative Min Byung-deok, the Act on the Issuance and Circulation of Value-Stable Digital Assets from Representative Ahn Do-gul, as well as the Act on Payment Innovation Using Value-Pegged Digital Assets from Representative Kim Eun-hye.
Concurrently with these legislative endeavors, enforcement measures are underway. On August 18, tax authorities in Jeju City initiated actions to freeze and seize cryptocurrency assets from residents suspected of tax evasion. Want to know how? Find out more here.