South Korea’s ruling party forms task force for crypto and stablecoin legislation
- Bridget Hubbard
- September 26, 2025
- Legal
- 0 Comments
New Digital Asset Task Force Launches
South Korea’s ruling Democratic Party has established a Digital Asset Task Force with the goal of passing comprehensive cryptocurrency and stablecoin legislation before the end of 2025. The announcement came during a launch ceremony at the National Assembly, where party officials emphasized the urgency of creating regulatory frameworks for the rapidly evolving digital asset market.
Han Jung-ae, chair of the Democratic Party’s policy committee, stated that market participants have been consistently calling for legislation covering virtual asset issuance, distribution, and stablecoins. She noted that technological innovation across various virtual asset-related fields requires corresponding regulatory systems that can keep pace with new financial market developments.
Addressing Capital Outflows and Monetary Sovereignty
The legislative push comes amid concerning data showing Korean crypto exchanges transferred approximately $40.6 billion worth of digital assets abroad during the first quarter of 2025. What’s particularly alarming to policymakers is that about half of these transfers occurred through dollar-pegged stablecoins like USDT and USDC, raising questions about South Korea’s financial control and monetary sovereignty.
Representative Lee Jung-moon, who leads the task force, explained that the world is currently experiencing what he described as a “frenzy of blockchain and digital assets.” Rather than being passive observers, the Democratic Party aims to actively lead regulatory changes. Lee specifically mentioned plans to establish a won-based stablecoin policy as a countermeasure to the dollar-based stablecoin dominance seen in competing countries.
Consumer Protection and Regulatory Approach
When asked about essential consumer protection mechanisms, Peter Chung from Presto Labs identified custody rules, disclosure requirements, and insurance mechanisms as top priorities. Chung expressed optimism about the government’s approach, noting their “pro-growth” stance and willingness to be flexible. He anticipates that legislation will likely favor innovation sandboxes rather than heavy-handed prudential regulation.
The task force plans extensive coordination with multiple government agencies including the Financial Services Commission, Financial Supervisory Service, and Bank of Korea. They also intend to engage directly with cryptocurrency exchanges and fintech companies through legislative public hearings to gather industry input.
Competing Legislative Efforts
South Korea’s stablecoin sector is already showing signs of growth, with BDACS recently launching KRW1, the country’s first regulated won-backed stablecoin through Woori Bank. Meanwhile, Kakao is preparing its own won-pegged token via the Kaia blockchain after registering relevant trademarks last month.
The Democratic Party faces competition from the ruling People Power Party, which filed its own stablecoin legislation in July. This creates a parliamentary divide over key regulatory issues. Despite this, Representative Ahn Do-geol expressed confidence that the task force has achieved consensus on passing digital asset-related legislation within the year through bipartisan agreement, though competing bills suggest challenging negotiations lie ahead.
The timing of this legislative push reflects South Korea’s determination to establish itself as a leader in digital asset regulation while protecting its financial sovereignty in an increasingly globalized cryptocurrency market.
