The Korean government is advancing the Digital Asset Framework Act (Draft) to permit domestic ICO and incorporate digital assets into the existing financial regulatory system, while significantly strengthening the legal liabilities of issuers and exchanges to enhance user protection.

The bill also tightens regulations on the domestic circulation of overseas-issued stablecoins by imposing requirements such as a local presence and adequate reserve assets.

However, ongoing policy differences between the Financial Services Commission and the Bank of Korea over key issues— including stablecoin issuance eligibility and bank equity participation—highlight the need for detailed subordinate regulations and a phased rollout through regulatory sandbox mechanisms to ensure effective implementation.

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