South Korea’s Democratic Party, led by Lee Jae-myung, proposes won-backed stablecoin to curb $40.8B outflows, outpacing US crypto regulation.
Newly elected President Lee Jae-myung is poised to implement a significant regulatory revision of the cryptocurrency industry in South Korea. The governing Democratic Party proposed the Digital Asset Basic Act, as Bloomberg reported earlier today. The purpose of the act is to simplify the use of stablecoins. Will South Korea’s new crypto regulations give it a competitive advantage over the United States?
South Korea is preparing to establish a regulatory framework for stablecoins
South Korea’s President Lee Jae-myung is poised to propel the nation to the vanguard of the global crypto industry, as indicated by the most recent Bloomberg report. The country aims to promote competition and increase transparency in the crypto sector by implementing the Digital Asset Basic Act.
It is important to note that Lee had pledged to allow the issuance of domestic stablecoins during his election campaign. Lee’s Democratic Party is advancing a crypto bill specifically concentrating on stablecoins, fulfilling his election promise.
Local companies will be permitted to issue stablecoins with a minimum equity capital of 500 million won ($368,000) in accordance with the law. Additionally, they are obligated to obtain regulatory sanction from the Financial Services Commission and maintain adequate reserves to ensure refunds.
“To prevent the exodus of national wealth abroad, we must establish a stablecoin market backed by the won,” declared Lee in May. The country is also preparing for other crypto developments in addition to the stablecoin plans.
For example, Lee has suggested that the country’s national pension fund investigate Bitcoin and crypto investments. Additionally, the nation is investigating the feasibility of establishing a Bitcoin reserve. South Korea previously proposed amendments to its anti-money laundering (AML) regulations to promote foreign investor participation in the domestic cryptocurrency market.
Will the United States lag behind South Korea in the cryptocurrency race?
Donald Trump’s commitment to transforming the United States into a “crypto capital” has garnered significant attention, particularly in light of his policies prioritizing cryptocurrency. More nations are joining the rally in support of Trump’s Bitcoin reserve plan.
Despite Trump’s proposal to establish clear guidelines for stablecoin regulation, the GENIUS Act, which has garnered significant attention, continues encountering obstacles. As Senator John Thune submitted a cloture motion, the measure is anticipated to be voted on for the final time this week.
The bill’s fate remains uncertain despite Senator Thune’s procedural maneuver, which restricts debate and allows for a final vote. John Deaton, an attorney for XRP, had previously cautioned that the regulation of stablecoins in the United States could be postponed until 2029.
Conversely, South Korea is making significant strides in developing its crypto regulatory framework. The country is poised to become a global champion in the crypto space due to President Lee Jae-myung’s crypto-focused policies. Data from the Bank of Korea indicates that stablecoin trading in South Korea has experienced a substantial increase. In the first quarter, transactions involving significant US dollar stablecoins totaled approximately $42 billion on five major domestic exchanges.
