South Korea Advances Stablecoin Legalization with New Crypto Bill

South Korea’s newly elected president, Lee Jae-myung, is pushing forward with his campaign pledge to authorize the issuance of domestic stablecoins, as his party introduces a new cryptocurrency bill.

The ruling Democratic Party submitted the Digital Asset Basic Act on Tuesday, designed to enhance transparency and foster competition in the crypto industry, according to Bloomberg.

Under the proposed legislation, local firms can issue stablecoins provided they maintain a minimum equity capital of 500 million won ($368,000). Issuers must also back the tokens with reserve funds to ensure refundability and obtain approval from the Financial Services Commission, South Korea’s financial regulator.

Stablecoin trading in South Korea has seen significant growth, with transactions involving major US dollar-pegged stablecoins hitting 57 trillion won ($42 billion) across five leading domestic exchanges in Q1 2024, per Bank of Korea data.