South Korea's Ruling Party Forms Task Force to Draft Stablecoin and Crypto Laws
South Korea's ruling Democratic Party has formed a Digital Asset Task Force to draft comprehensive stablecoin and crypto legislation. The task force aims to protect the country's monetary sovereignty and keep pace with evolving financial markets, while facing competition from the ruling People Power Party and pressure from capital flight.
The task force, led by Democratic Party lawmaker Kim Byung-kee, plans to favor 'innovation sandboxes' over heavy regulation. This approach allows for testing of new technologies in a controlled environment. The party faces competition from the People Power Party, which has also shown interest in stablecoin legislation.
South Korea has seen significant capital flight in digital assets, with $40.6 billion transferred abroad in Q1 2025, half of which were stablecoins. The task force will focus on stablecoins like USDT and USDC, as well as other virtual assets. The aim is to draft legislation that will protect consumers and maintain Korea's monetary sovereignty.
The Democratic Party of Korea (DPK) has agreed to pass the digital currency law within 2025 through a bipartisan vote. The task force plans to engage with crypto exchanges, fintech companies, and government agencies to enact digital asset laws during this year's regular and year-end National Assembly proceedings.
South Korea's stablecoin sector is growing, with BDACS launching KRW1 and Kakao preparing its own won-pegged token. The task force will prioritize custody rules, disclosure requirements, and insurance mechanisms to ensure consumer protection in the digital asset market.
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