South Korea's FSC Pledges Swift Digital Asset Basic Act Submission

South Korea's government will submit its Digital Asset Basic Act bill to the National Assembly "as soon as possible," Shin Jin-chang, vice chairman of the Financial Services Commission, said on Nov. 12. The pledge came at a seminar titled "Digital Assets: The Institutional Era Arrives," held at the National Assembly Members' Office Building in Seoul's Yeouido. Shin promised speed; no date accompanied it.

The bill, still in drafting, would institutionalize the digital-asset industry under a framework that pairs growth with user protection. Shin said the government would weigh matters raised at the seminar and elsewhere before finalizing the text. In plain words: legislation is coming, but its timing remains undefined.

What would the act cover?

According to Shin, the legislation would restructure the market along three lines:

• Entry regulations by business type, replacing the current regime in which exchange operators face most of the scrutiny.
• Conduct rules comparable to those applied to financial companies, extending governance standards to digital-asset firms.
• Transparency and accountability measures across issuance and distribution of digital assets.

The stated aim is an environment in which users can trade with confidence. That framing mirrors the customer-protection language of existing securities regulation, though the government has not specified which business types fall under which thresholds.

Why the market's character has changed

Shin said the global digital-asset market has shifted from one centered on price volatility to one influenced by macroeconomic conditions and flows of institutional capital. The industry's center of gravity, he added, is expanding beyond exchanges into financial infrastructure such as payments. That diagnosis implies the regulatory perimeter must widen as well — a rationale for business-type licensing rather than exchange-focused rules.

How will security failures be addressed?

Referring to a recent string of hacking incidents, Shin said security and the safety of IT operations are key factors that determine trust in the industry. He committed the government to establishing sufficient rules on security and systems safety. The pledge followed the incidents; it did not itemize specific mandates, audit requirements or penalty frameworks.

What about corporate participation?

Shin reaffirmed a phased approach to broader corporate participation in the digital-asset market. User protection and market stability must come first, he said, to foster a healthy market ecosystem. Participation by corporations with sufficient capital and risk-bearing capacity, he added, is also important — a formulation that suggests capital thresholds without stating them.

The FSC announced a roadmap for broader corporate participation in February 2024 and has since pursued limited measures, including market participation by nonprofit organizations. Shin said the government would push phased steps for corporate participation while considering consistency with digital-asset bills that will be discussed in the National Assembly. The caveat is coordination: multiple bills in the Assembly could complicate a single unified timeline.

What happens next

Shin said the government would continue to gather views from the market on current issues, practical difficulties and ways to improve the system, and would maintain communication with the industry. Consultation, however, is not a deadline.

The immediate question for firms operating in South Korea is when the bill text arrives at the National Assembly and which business types face the heaviest entry requirements. Until the government publishes the draft, the conduct rules for digital-asset companies remain aspirations rather than enforceable standards.

By Elena Vasquez