The South Korean government may postpone the submission of the "Digital Assets Basic Law" until next year, and plans to include provisions such as no-fault compensation.
PANews reported on December 30th that, according to Yonhap News Agency, the draft of the "Digital Asset Basic Law" (the second phase of the Virtual Asset Act), currently being drafted by the South Korean Financial Services Commission, has been partially disclosed. The draft is expected to include several investor protection measures, such as requiring stablecoin issuers to invest reserves in assets like deposits and government bonds, and to entrust more than 100% of the outstanding balance to banks or other regulatory institutions to achieve bankruptcy risk isolation. The bill may also stipulate that digital asset operators will be liable for damages without fault in the event of hacking attacks or system failures, and their disclosure obligations, terms, and advertising regulations will be aligned with financial industry standards. Furthermore, the bill may allow the sale of digital assets domestically, provided there is full information disclosure, aiming to address the current situation where domestic ICOs are banned, leading to projects being issued overseas and then flowing back to China.
However, the submission of the bill may be delayed until next year due to key disputes. Core disagreements include: the Bank of Korea advocates allowing only consortia with banks holding a majority stake in stablecoins to issue them, while the Financial Services Commission believes it is inappropriate to legally mandate bank ownership ratios; the two sides also disagree on whether a new inter-agency consensus committee should be established. Furthermore, issues such as initial capital requirements for stablecoin issuers and whether exchange issuance and circulation functions should be separated remain to be coordinated. Due to the delay in submitting the government bill, the ruling party's digital asset task force is reportedly preparing a separate version of the bill based on existing legislative proposals.
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