South Korea drafts bill to regulate stablecoins, tokenized assets

South Korean lawmakers circulated a draft bill that would place stablecoins and tokenized real-world assets under the country's financial laws. The text has been prepared for review by the National Assembly.

Under the draft, issuers, custodians and trading platforms would be subject to the same regulatory framework that governs banks, securities firms and payment services. Firms would need to register or obtain licenses, meet disclosure and reporting obligations, and comply with AML (anti-money-laundering) and consumer protection requirements.

The proposal sets rules for oversight of reserve holdings and operational controls for stablecoin issuers and imposes transparency requirements for how tokenized assets are created, transferred and redeemed. Trading venues and custody services handling these tokens would face conduct and reporting standards comparable to those applied to securities firms and payment providers.

Regulators expect the rules to affect domestic issuers, overseas firms seeking access to the South Korean market and local exchanges that list or custody such tokens. The draft includes transitional arrangements to give existing platforms and token projects time to align operations with the new requirements.

Officials prepared the draft after consultations with financial watchdogs and industry stakeholders and plan to open the text for public comment. Next steps include a formal regulatory impact assessment, committee hearings in the National Assembly and a floor vote. If the bill is approved, the rules would be phased in so firms can secure licenses, update systems and adjust contractual arrangements.

Authorities in other countries are developing rules for stablecoins and tokenized assets in response to concerns about reserve adequacy, consumer harm during market stress and illicit finance. The South Korean proposal draws oversight authority from existing financial statutes rather than creating a separate legal regime.

Market participants will watch details such as permitted reserve compositions for stablecoins, the legal treatment of tokenized ownership rights and compliance costs for smaller platforms. The government has indicated it will consider proportional requirements for smaller operators and fintech startups to limit barriers to entry.