South Korean FSC Launches Crucial Virtual Asset Committee Meeting to Finalize Landmark Digital Asset Act

SEOUL, South Korea – March 1, 2025 – In a pivotal move for the global cryptocurrency sector, South Korea’s Financial Services Commission (FSC) will convene its influential Virtual Asset Committee next week, setting the stage for the nation’s first comprehensive digital asset legislation. This crucial meeting, scheduled for March 4, represents the committee’s inaugural session this year and aims to finalize the government’s proposed ‘Basic Act on Digital Assets’ after incorporating critical feedback from private sector advisors. The outcome will directly shape the regulatory landscape for exchanges, stablecoins, and investor protection in one of the world’s most active crypto markets.

South Korean FSC Virtual Asset Committee Convenes for Landmark Session

The Financial Services Commission officially confirmed the meeting date following a report by The Herald Business. Consequently, this assembly marks a significant step in South Korea’s multi-year journey toward formal cryptocurrency regulation. The Virtual Asset Committee itself operates as a public-private advisory body, bridging government authorities with industry experts from finance, technology, and law. Therefore, its recommendations carry substantial weight in the legislative process. Historically, South Korea has employed a piecemeal regulatory approach, but this new basic act seeks to establish a unified, forward-looking framework. The committee’s diverse membership ensures that proposed rules balance market innovation with necessary consumer safeguards.

Core Agenda: Exchange Ownership Caps and Stablecoin Frameworks

The committee’s primary agenda features two transformative proposals that could redefine market structure. First, authorities will discuss imposing strict limits on major shareholder stakes in cryptocurrency exchanges. Specifically, the proposal suggests capping ownership at a range between 15% and 20%. This measure directly addresses concerns over market concentration and potential conflicts of interest. For context, major global exchanges often have concentrated ownership structures. By contrast, South Korea’s proposed cap aims to foster greater corporate governance and reduce systemic risk. The table below outlines the potential impact:

Second, and equally significant, the committee will debate a framework for stablecoin issuance. The government’s draft legislation advocates for a model led by banking institutions, which must hold a majority stake of 50% plus one share in any issuing entity. This approach prioritizes financial stability and aligns with traditional banking oversight. Moreover, it contrasts with models in other jurisdictions where non-bank fintech companies lead stablecoin projects. The FSC’s preference for bank leadership stems from a desire to leverage existing prudential regulations and deposit insurance schemes.

Expert Analysis and Market Implications

Financial policy analysts highlight the meeting’s timing within a broader global regulatory trend. Following the European Union’s Markets in Crypto-Assets (MiCA) regulation and ongoing U.S. debates, South Korea’s actions contribute to an emerging international standard. Experts note that the ownership cap could force restructuring at some domestic exchanges, potentially leading to board diversification and new investment. Simultaneously, the bank-centric stablecoin model may accelerate partnerships between traditional finance and blockchain firms. Market observers anticipate that clear rules will reduce legal uncertainty, possibly attracting more institutional capital to South Korea’s digital asset ecosystem. However, the final legislation must carefully avoid stifling innovation while ensuring robust investor protection.

Legislative Timeline and Expected Outcomes

The March 4 meeting initiates a formal consultation phase. After gathering feedback, the FSC will refine the legislative proposal before submitting it to the National Assembly. The process typically involves several readings and committee reviews. Given the political consensus on the need for digital asset regulation, observers predict the bill could pass within the current parliamentary session. Key stakeholders, including the Korea Fintech Industry Association and major exchange operators, have previously called for regulatory clarity. The proposed basic act aims to cover multiple areas beyond the committee’s immediate agenda:

• Consumer Protection Mandates: Rules for custody, disclosures, and dispute resolution.
• Market Integrity Measures: Guidelines to prevent market manipulation and insider trading.
• AML/CFT Compliance: Enhanced anti-money laundering and counter-terrorist financing protocols aligned with FATF standards.
• Token Classification: A framework to distinguish between securities, payment tokens, and utility tokens.

This comprehensive scope underscores the legislation’s foundational role. Furthermore, the Virtual Asset Committee’s deliberations will set a precedent for how South Korea engages with other digital asset innovations, including decentralized finance (DeFi) and non-fungible tokens (NFTs). The government has signaled its intent to create a regulatory sandbox to test new financial products safely.

Conclusion

The upcoming South Korean FSC Virtual Asset Committee meeting represents a critical juncture for digital asset regulation both domestically and internationally. By addressing exchange governance and stablecoin issuance, South Korea positions itself as a thoughtful regulator in the rapidly evolving cryptocurrency landscape. The proposed basic act, shaped by this committee’s input, promises to bring much-needed clarity and stability to the market. Ultimately, the decisions made on March 4 will influence investor confidence, guide industry development, and contribute to the global dialogue on balancing innovation with protection in the digital age.

FAQs

Q1: What is the South Korean FSC Virtual Asset Committee?
The Virtual Asset Committee is a public-private advisory body convened by South Korea’s Financial Services Commission. It includes experts from government, finance, technology, and law to provide recommendations on digital asset policy and legislation.

Q2: What is the main purpose of the March 4 meeting?
The primary purpose is to discuss and provide feedback on the government’s draft ‘Basic Act on Digital Assets,’ focusing specifically on proposed caps for exchange ownership and a framework for bank-led stablecoin issuance.

Q3: How could the 15-20% ownership cap affect cryptocurrency exchanges?
This rule would require major shareholders of exchanges to reduce their stakes if they exceed the cap. It aims to improve corporate governance, prevent market manipulation, and diversify control, potentially leading to board restructuring and new investment.

Q4: Why does the proposed stablecoin framework require bank leadership?
The FSC advocates for a model where banks hold a majority stake (50% plus one share) to leverage existing banking regulations, oversight mechanisms, and deposit insurance schemes. This approach prioritizes financial stability and consumer protection.

Q5: What are the next steps after the committee meeting?
Following the meeting, the FSC will incorporate the committee’s feedback into the legislative proposal. The refined bill will then be submitted to the National Assembly for debate, review by other committees, and eventual voting to become law.