- South Korea accelerates its Digital Asset Act after AML and KYC lapses across major local exchanges.
- The upcoming bill introduces a bank-led model for issuing won-backed stablecoins.
South Korea is pushing head to complete the Digital Asset Act by January 2026 after regulators uncovered recurring AML and KYC issues at a number of local exchanges.
Furthermore, political pressure since the last election has also shaped the new direction of digital asset policy in the country.
In recent days, we reported that the South Korean Financial Services Authority (FIU) is preparing sequential penalties for Korbit, Gopax, Bithumb, and Coinone. The violations discovered are serious, ranging from repeated AML procedural failures to identity verification deemed too lax.
Regulators, on the other hand, believe that more streamlined regulations are needed to prevent the domestic crypto industry from remaining in a gray area that is tiring for all parties. This situation has prompted the government to expedite the finalization of the new bill.
Even earlier, this policy direction had already been visible during the election campaign last May. At that time, we highlighted how crypto became a hot topic. The candidates have promised to pave the way for crypto ETFs and review existing laws to make digital assets more acceptable within the traditional financial system.
Lee Myung of the Democratic Party even promoted the idea of a Korean won-backed stablecoin, an idea that now seems even more relevant as the government prepares a major bill that the market is eagerly awaiting.
South Korea Finalizes a Structured Approach to Its Upcoming Stablecoin System
Still, the heart of the bill under development leans heavily on technical and structural adjustments. Officials are aiming to finish the draft by December 10, 2025, before sending it to parliament early next year, though lawmakers already have a fallback version prepared if the deadline moves.
Under the new arrangement, the won-backed stablecoin will use a bank-led consortium model. The government and opposition have agreed that banks should play a dominant role, while technology companies can remain involved. This arrangement is claimed to strike a balance: banks maintain the security and reserve of assets, while the private sector can continue to bring the innovation the industry needs.
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