The proposed South Korean Digital Assets Basic Act is expected to include a no-fault liability and stablecoin bankruptcy protection mechanism, with the government's submission of the bill possibly delayed until next year.
BlockBeats News, December 30th, the South Korean government is formulating the "Digital Assets Basic Law" (Second-phase legislation on crypto assets), which is expected to include multiple investor protection measures, including introducing a strict liability compensation system for digital asset service providers and establishing a bankruptcy risk isolation mechanism for stablecoin issuers. However, due to significant disagreements still surrounding core issues such as the entity responsible for stablecoin issuance, the expected submission of the government's proposal is likely to be delayed until next year.
According to reports, in the government draft that the Financial Services Commission is studying, stablecoin issuers may be required to allocate reserves to low-risk assets such as deposits and government bonds, and maintain funds not less than 100% of the issuance balance in deposits or trusts at banks or other custodial institutions to prevent the transmission of bankruptcy risks from the issuer to investors.
In addition, the draft may also, under the premise of strengthening information disclosure, allow the sale of digital assets within South Korea to correct the previous practice of "overseas issuance, domestic circulation" formed due to administrative restrictions on ICOs. Although the legislative framework has taken shape preliminarily, disagreements still exist among the Financial Services Commission, the Bank of Korea, and other institutions regarding key issues such as the qualifications of stablecoin issuers, approval mechanisms, minimum capital requirements, and whether exchanges can simultaneously perform issuance and circulation functions. The Financial Services Commission stated that relevant departments are continuing to narrow the gap in positions and have not yet reached a conclusion on the final proposal. (Yonhap News)
