South Korea is accelerating its efforts to regulate stablecoins under a cryptocurrency bill, fulfilling a key campaign promise by President Lee Jae-myung, Bloomberg reported on Tuesday.
The ruling Democratic Party on Tuesday introduced the Basic Digital Asset Act, which sets clear guidelines for the issuance of stablecoins, including a minimum capital requirement of 500 million won ($368,000) and a mandatory reserve.
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The legislation, designed to improve transparency and competition in the cryptocurrency sector, requires issuers to obtain approval from the Financial Services Commission (FSC).
This move comes at a time when transactions with stablecoins are on the rise in South Korea, with $42 billion in US dollar-pegged stablecoin transactions recorded in the first quarter of 2024 on major platforms, according to data from the Bank of Korea.