South Korea's Digital Asset Basic Act: A Major Step Toward Regulated Crypto Growth

South Korea's governing Democratic Party approved the draft of the "Digital Asset Basic Act" on January 27, 2026. This extensive measure is meant to provide a clear and strong legal framework for stablecoins, tokenized assets, and the wider digital asset environment. Strict standards for stablecoin issuers are established by the law, which includes a minimum paid-in capital of ₩5 billion (around $3.5 million), mandatory licencing, entire (100%+) reserve backing with premium assets, and guaranteed redemption rights at par value. These initiatives attempt to improve user protection, settle long-standing territorial disputes between the Financial Services Commission (FSC) and the Bank of Korea, and make South Korea a more dependable and appealing location for stablecoin activities.

The bill also clarifies licensing and operating requirements for service providers, opening the path for approved spot Bitcoin ETFs to begin as early as 2026, so tackling tokenized real-world assets and securities. Furthermore to stop disproportionate influence and increase market integrity, it recommends ownership concentration restrictions of 15–20% for significant crypto exchange shareholders —a model based on rules for the classic securities market. These clauses show a middle ground that promotes creativity while setting limits to reduce systematic hazards.

Legislators plan to officially bring the measure before the National Assembly before the Lunar New Year break in February 2026, leveraging the nation's recent favorable stance on crypto, including the lifting of venture capital investment limitations on crypto-related companies. If approved, the Digital Asset Basic Act will signal a major change that would set South Korea to draw world crypto companies, institutional investment, and talent while also upholding strict consumer protections in one of the most active digital asset markets in the world.