In an effort to embrace stablecoins, South Korea has introduced a new cryptocurrency bill under the leadership of the newly elected President Lee Jae-myung. Led by Lee and the country’s ruling Democratic Party, the new president introduced the Digital Asset Basic Act on Tuesday with the aim of reforming the digital asset structure in the country.

According to Bloomberg, the goal of the bill is to establish a legal framework for domestic stablecoins, which will allow local companies to issue stablecoins while meeting the financial and regulatory requirements.

South Korea Introduces Digital Asset Basic Act

In order to issue stablecoins, companies must hold at least 500 million won (approximately $368,000) in equity capital, maintain reserves to guarantee redemptions, and obtain approval from the Financial Services Commission. Given the surge in stablecoin activity in the country, it was necessary to introduce a bill that implemented regulatory control over the issuance of stablecoins.

As per the data shared by the Bank of Korea, trading involving leading U.S. dollar stablecoins on South Korea’s five main exchanges reached 57 trillion won ($42 billion) in Q1 of 2025. Thanks to the introduction of this bill, it is expected that the trading volumes will be further boosted.

South Korea is considered among the most active crypto markets in the world. Reportedly, roughly one-third of its population participates in crypto investments.

Important Reads: South Korea Launches Centralized Crypto Policy in Major Regulatory Overhaul

President Lee Promises New Crypto Shift

The newly elected President Lee is currently making progress on all his campaign promises, which also include the legalization of local stablecoins. He is also working on introducing Bitcoin ETFs and a national pension fund to invest in Bitcoin. In a policy forum last month, Lee said, “We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas.”

However, he is facing some opposition to his ambitious proposals. In particular, the Bank of Korea has raised concerns over potential risks to the monetary policy. Governor Rhee Chang-yong warned that privately issued stablecoins could undermine financial stability. The central bank has asserted that it should oversee any local stablecoin initiatives.

The South Korean public remembers the Terra blockchain collapse in 2022. The blockchain was co-founded by Do Kwon. It remains a reminder for investors of the possible risks in the volatile crypto space.

However, the local markets have responded to the news with enthusiasm. Shares of KakaoPay, a digital wallet and mobile payment firm, surged by as much as 45% over the past five days. Still, analysts at JPMorgan cautioned that the rally may be premature, noting that the actual benefits of the proposed stablecoin policy remain unclear.

As the legislation moves forward, South Korea’s approach may become a model for other countries looking to integrate stablecoins into their financial systems while navigating the associated risks.

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