South Korea’s Digital Asset Basic Act may be postponed until next year for submission

The South Korean government is formulating the "Basic Law on Digital Assets," which plans to introduce investor protection measures such as strict liability for compensation and bankruptcy isolation mechanisms for stablecoins. The draft proposes that stablecoin issuers allocate reserve assets to low-risk assets and deposit or entrust them with banks or other management institutions, with the fund ratio not less than 100% of the issued balance. Information disclosure, terms, and advertising regulatory standards for digital asset operators will be close to the level of traditional financial institutions, and strict liability for compensation may apply in cases of hacker attacks or system failures. In addition, the draft may allow digital assets to be sold within South Korea to correct the practice of "overseas issuance, domestic circulation." Due to ongoing disagreements over qualifications for stablecoin issuers and other issues, the submission of the government proposal is expected to be delayed until next year.