South Korea’s conservative People Power Party (PPP) is preparing to introduce a new legislative proposal aimed at promoting the country’s digital asset sector.
Named the Digital Asset Promotion Basic Act, the bill is expected to be officially presented next Monday and is seen as a major shift in the government’s stance on cryptocurrency.
Push to lead in the digital asset economy
The People Power Party’s latest initiative seeks to establish South Korea as a global leader in blockchain and digital asset innovation. Kim Sang-hoon, the party’s policy chief, stated that the government must move beyond excessive regulation and foster a more favorable environment for virtual assets. He emphasized that strict anti-money laundering measures have discouraged foreign investment and pushed domestic capital out of the market.
Kim described cryptocurrency as a key element of the emerging economy and suggested it could become a modern-day store of value similar to gold. He said that South Korea must no longer remain uncertain or hesitant but instead take bold steps to institutionalize and promote the digital asset industry.
Regulatory bodies signal support for reform
South Korea’s Financial Services Commission has confirmed its intention to ease restrictions on cryptocurrency investments by institutional players gradually. The regulator is also continuing to enforce regulatory measures in line with the country’s broader crypto framework introduced in 2023. These include rules covering stablecoins, token listings, and disclosures.
Authorities are signaling a more balanced approach that includes both investor protection and industry support. The shift is seen as an effort to strike a middle ground between maintaining market integrity and allowing innovation in the rapidly evolving digital asset space.
Proposed changes to existing crypto rules
In addition to new promotion efforts, lawmakers have introduced updates to the Virtual Asset User Protection Act. These proposed amendments aim to tighten rules for cryptocurrency exchanges and enhance oversight of online communities that promote speculative crypto activity. The proposals include mandatory registration of certain chat rooms as quasi-investment advisory entities under the Financial Services Commission.
Exchange operators need to announce every modification they perform to their terms and conditions. Lawmakers introduced protective measures which safeguard customer assets if an exchange files bankruptcy. All customers should be able to recover their assets through different channels independent of becoming general unsecured creditors.