South Korea’s ruling party has reportedly decided to go ahead with a plan to enable the institutionalization of tokenized real-world assets or RWAs and stablecoins under the current regulatory frameworks. As indicated in a report from the Seoul Economic Daily, the Asian country’s Democratic Party of Korea has included certain guidelines pertaining to crypto-assets that are linked or associated with RWAs in its proposal for the planned Digital Asset Basic Act.
According to local sources, the bill requires the issuers of tokenized RWAs to deposit the associated assets into a so-called managed trust, as mentioned in the Capital Markets Act.
More details will be revealed in a presidential decree, the report has claimed.
The update also stated that the said proposal categorizes stablecoins as a means or mode of payment under the nation’s Foreign Exchange Transactions Act.
Basically, this means that foreign exchange (FX) authorities will be overseeing stablecoin firms without needing any separate registration.
In addition, the said proposal reportedly exempts smaller stablecoin transfers for products and services from FX reporting guidelines. This may be seen as an attempt to encourage the usage of stablecoins while also ensuring that larger transfers are most closely monitored and scrutinized.
Notably, South Korea’s latest proposal may also prohibits any yield generated on idle stablecoin holdings, the report revealed. This move is somewhat similar to what US banks are supporting but more than likely, the industry will see more progress in this area. In the future, most providers in the US and other jurisdictions will be able to offer competitive yields (as consumer demand grows).
And other guidelines in the proposal stated that the Korean financial regulator, the Financial Services Commission (FSC), will be tasked with formulating the appropriate technical standards for ensuring stablecoin interoperability.
It also intends to form a consistent disclosure framework for crypto-assets.
It’s also worth noting that the so-called Digital Asset Basic Act is South Korea’s second installment of regulations for crypto-assets. And it has been encountering legislative challenges, and running behind on its initial 2025 due date / tentative timeline.
