South Korea Targets 2026 Passage of Digital Asset Basic Act

South Korea's Ministry of Economy and Finance said it will push to pass the Digital Asset Basic Act in the second half of 2026, aiming to integrate crypto more fully into the country's formal asset management framework. The legislation would set rules for the issuance, trading, custody and oversight of digital assets. The bill was first submitted to the National Assembly by the ruling Democratic Party in June 2025, with additional provisions confirmed by April 2026. In a July 14, 2026 update, the ministry reaffirmed its goal of securing passage later this year. Under the proposed framework, digital assets would be classified into two categories: "general" and "asset-linked". Asset-linked tokens, including stablecoins and other instruments pegged to real-world value, would be subject to tighter requirements. Stablecoin issuers would need to obtain licenses, maintain sufficient reserves and meet redemption obligations, under supervision by the Financial Services Commission. For certain digital asset issuers, the minimum capital threshold is set at KRW 500 million (about $360,000), though that level could still change during legislative negotiations. Alongside the bill, the government plans to amend the Capital Markets Act to permit spot digital-asset ETFs, with spot Bitcoin ETFs expected to be first. It also plans to pilot tokenized government bonds in 2027, tying the initiative to broader central bank digital currency efforts and exploring blockchain interoperability. The regulatory package includes a framework for cross-border stablecoin payments as well. The move reflects the ruling party's policy push and comes after earlier difficulties in managing stablecoins, which appear to have accelerated a more comprehensive regulatory approach. For investors, the main uncertainty remains implementation. Passing the act in the second half of 2026 is an aggressive timetable. The KRW 500 million capital requirement may be revised upward, and the 2027 tokenized bond pilot depends in part on progress in CBDC development.