South Korea Law to Bring Stablecoins and RWAs Under Existing Financial Rules

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South Korea’s ruling Democratic Party has reportedly proposed a law that would bring stablecoins and tokenized real-world assets (RWAs) under its existing financial regulatory frameworks.

In a draft of the proposed Digital Asset Basic Act, stablecoins used in cross-border transactions would reportedly be classified as a “means of payment” under South Korea’s Foreign Exchange Transactions Act. 

South Korea first submitted the Digital Asset Basic Act in 2025. However, the legislation has since faced delays and remains under debate.

The Bank of Korea governor has previously expressed concern that won-denominated stablecoins could complicate capital flow management and foreign exchange stability.

Stablecoin issuers would also be prohibited from offering interest or yield on stablecoin holdings. However, the draft reportedly includes exemptions, with some stablecoin payments for goods and services potentially excluded from foreign exchange reporting requirements within defined limits. 

Issuers of tokenized RWAs would also need to make sure they are backed with underlying assets placed in managed trusts.

Meanwhile, the Financial Services Commission is expected to develop interoperability standards for digital asset networks to reduce fragmentation.

The draft signals a general preference for expanding the scope of traditional financial rules to include digital assets, rather than creating new frameworks.