A new legislative push in South Korea could usher in a regulated stablecoin era, as a ruling party lawmaker introduces a bill aiming to legitimize Korean won-backed digital currencies. The proposed Digital Asset Basic Act outlines strict requirements for stablecoin issuers, including a minimum capital threshold of 500 million won, or approximately $367,890.
The bill is being led by Min Byeong-deok, and it also introduces a legal definition for assets in the digital world. The bill creates licenses and a Digital Asset Committee, which have to be managed by the President, to look over the crypto market.
The proposal is likely to mean that South Korean stablecoins backed by the won can soon be a competitor for USDT and USDC. Since the move, people can use Blockchain more securely, as it takes place within the local economy without the risks related to trading currencies.
Besides looking at how the market should be regulated, the bill states the penalties for anyone who manipulates prices, including purchasing and selling stocks in bulk. These actions are directed at increasing trust among investors and making the process clear where there are frequent frauds.
Min pointed out that the draft takes ideas from current structures used in the United States, European Union, Japan, and Hong Kong. Such jurisdictions have applied the same rules to the licensing of digital assets and continue to influence.
Kakao-Backed Kaia Joins the Race as Stablecoin Momentum Builds
Even though the bill has yet to pass through the legislature, the private sector is doing a lot to prepare. Kaia, Kakao’s blockchain company, has decided to join the stablecoin industry.
Kaia is readying to release a Korean won-based stablecoin that is in line with new laws and regulations. Because Kakao Pay relies on its digital infrastructure, the project is set to be popular among many users.
Once the news was released, both Kakao’s KPAY stocks and those of its main competitor, Danal, surged, revealing investors were eager to buy them. Percentage-wise, half of those studying Korean cryptocurrency wish to buy more in the near future.
When the government and firms cooperate on their strategies, it looks like South Korea will establish a secure and modern stablecoin market. Those following the industry think that Turkey might soon be leading in the adoption of regulated digital assets.
