South Korea’s Democratic Party sets up ‘Digital Asset Committee’

South Korea’s dominant political party, the Democratic Party, has established a Digital Asset Committee to shape cryptocurrency policy and foster industry growth. This committee, inaugurated on May 13th at the National Assembly Members’ Hall in Seoul, aims to address critical regulatory uncertainties, particularly concerning stablecoins, following the US government’s push for dollar-pegged stablecoins. The committee’s formation adds to existing efforts, including the Virtual Asset Committee (launched late 2024) and a public-private task force (established in 2022), both initiated by the Financial Services Commission (FSC).

The committee boasts prominent figures, including National Assembly Chairman Min Byeong-deok (committee chairman), along with Yoon Yeo-joon, Maeng Seong-gyu, Kim Byeong-gi, and former National Assembly Chairman Kim Jeong-woo. Furthermore, major cryptocurrency exchanges like Upbit, Bithumb, Coinbit, and Gopax will participate, according to ChosunBiz.

A key focus of the committee is addressing the limitations of South Korea’s “one-exchange, one-bank” rule, which restricts exchanges to partnerships with a single lender. Chairman Min highlighted the rule’s shortcomings and the committee’s work with regulators to find solutions. Discussions also encompass stablecoin regulation, including the appropriate supervisory body (the Bank of Korea or the FSC) and whether licensing or reporting systems are necessary.

This initiative comes after a Bank of Korea executive, Koh Kyung-chul, voiced concerns about won-backed stablecoins at a May 12th conference. Koh emphasized the potential impact on monetary policy, financial stability, and payment settlements, advocating for central bank intervention in the approval process to minimize negative effects. The Digital Asset Committee’s work will significantly influence the future of cryptocurrency regulation and development within South Korea.