South Korea’s Digital Asset Bill Stalls Again as Key Disagreements Remain Unresolved

A legislative effort to establish a comprehensive legal framework for South Korea’s digital asset industry has remained stalled in the National Assembly for more than a year, and persistent disagreements over two critical issues are likely to delay progress further, according to a report by Yonhap News Agency.

Political Calendar Adds Pressure

The ruling Democratic Party is expected to conclude its national convention on August 17. Once its policy committee is formed, the party plans to restart its digital asset task force, which has been inactive for months. Both the party and the government see the regular National Assembly session in September as a potential turning point for moving the bill forward.

However, the timeline is tight. With the session set to begin in early September, lawmakers have only a few weeks to bridge differences on the bill’s most contentious provisions.

Two Core Disputes Blocking Progress

The report identifies two main issues that have prevented the bill from advancing:

• Stablecoin issuance structure: Lawmakers disagree on how to regulate won-based stablecoins, particularly whether to require full reserve backing and how to define permissible reserve assets. Some legislators argue for strict oversight to prevent systemic risk, while others warn that overly rigid rules could stifle innovation.
• Limits on major shareholders’ equity stakes: The bill includes provisions that would cap the equity stakes major shareholders can hold in digital asset exchanges. Critics say the proposed limits are too restrictive and could discourage investment, while supporters argue they are necessary to prevent market manipulation and conflicts of interest.

Broader Implications for the Industry

South Korea has one of the world’s most active cryptocurrency trading markets, but its regulatory environment remains fragmented. The absence of a unified legal framework has created uncertainty for exchanges, investors, and businesses operating in the space. A clear law would provide much-needed clarity on licensing, consumer protection, and anti-money laundering requirements.

The prolonged delay also raises questions about the country’s competitiveness as a hub for blockchain and digital asset innovation. Other jurisdictions, including Japan, Singapore, and the European Union, have already moved forward with comprehensive regulatory frameworks.

What Happens Next

The Democratic Party’s digital asset task force will need to draft compromise language that can win support from both sides of the aisle. If an agreement is not reached before the September plenary session, the bill could be pushed to the next regular session in 2026, further delaying implementation.

Industry observers say the stakes are high. A well-designed law could boost investor confidence and attract institutional participation, while a poorly designed one could drive businesses offshore.

Conclusion

South Korea’s digital asset bill remains a work in progress, with fundamental disagreements over stablecoin regulation and shareholder equity limits unresolved. The upcoming September session offers a narrow window for progress, but political dynamics and the complexity of the issues suggest that further delays are likely. For now, the industry waits — and watches.

FAQs

Q1: Why has South Korea’s digital asset bill been stalled for over a year?
A1: The bill has stalled due to disagreements between lawmakers over two key issues: how to regulate won-based stablecoins and whether to impose limits on major shareholders’ equity stakes in digital asset exchanges.

Q2: When is the next opportunity for the bill to pass?
A2: The regular National Assembly session in September 2025 is seen as the next potential turning point. If no agreement is reached, the bill may be delayed until the 2026 session.

Q3: Why does this matter for the broader cryptocurrency market?
A3: South Korea is a major cryptocurrency trading hub, and a clear legal framework would provide regulatory certainty, boost investor confidence, and help prevent market manipulation. Delays could hurt the country’s competitiveness in the digital asset space.