The country faces mounting pressure over capital flight, with $40.6 billion in digital assets transferred abroad in Q1 2025, half in stablecoins.
South Korea’s ruling Democratic Party has launched a new “Digital Asset Task Force,” pledging to push through legislation on stablecoins and virtual assets by year’s end, an effort officials say will help “protect Korea’s monetary sovereignty.”
“The need for legislation to cover issuance, distribution, and stablecoins of virtual assets is constantly being raised in the market,” Han Jung-ae, chair of the Democratic Party’s policy committee, said at the launch ceremony at the National Assembly, according to a Maeil Business Newspaper report, a local news outlet.
“It is time to innovate technology in various fields related to virtual assets and prepare a reasonable system to keep pace with the flow of new financial markets,” she said.
The push comes as Korean crypto exchanges transferred $40.6 billion worth of digital assets abroad in Q1 2025, with half flowing through stablecoins such as USDT and USDC — causing alarm among policymakers over the nation’s financial control.
Representative Lee Jung-moon, head of the task force, said the aim is to enact digital asset laws during the regular and year-end National Assembly sessions in 2025, as the world is in a “frenzy of blockchain and digital assets,” and that the Democratic Party does not want to be “pushed along” but to “lead the change.”
Lee said the party will “establish a won-based stablecoin policy against the U.S. dollar-based stablecoin and digital asset policy of competing countries.”
Asked about the most urgent consumer protection mechanisms needed in forthcoming legislation, Peter Chung, head of research at quantitative trading firm Presto Labs, told Decrypt that “custody rules, disclosure requirements, and insurance mechanisms” are the top priorities.
Given the new government’s “pro-growth” stance and willingness to be “open-minded and flexible,” Chung expects legislation to favor “innovation sandboxes” over heavier prudential regulation.
The task force plans to coordinate with multiple government agencies, including the Financial Services Commission, Financial Supervisory Service, and Bank of Korea, while engaging directly with crypto exchanges and fintech companies through legislative public hearings.
The legislative push comes as South Korea’s stablecoin sector gains momentum, with BDACS launching KRW1, the country’s first regulated won-backed stablecoin via Woori Bank, while Kakao prepares its own won-pegged token through Kaia blockchain after registering the “KRWGlobal” and “KRWKaia” trademarks last month.
The Democratic Party faces competition from the ruling People Power Party, which filed competing stablecoin legislation in July, creating a parliamentary divide over key regulatory issues.
Rep. Ahn Do-geol, who introduced the Democratic Party’s stablecoin proposal, said the task force has “formed a consensus” on the goal of passing digital asset-related legislation within the year through bipartisan agreement — though competing bills suggest tough negotiations ahead.
