South Korea drafts Digital Asset Basic Act with no-fault liability and stablecoin bankruptcy ring-fencing

South Korea's Financial Services Commission is preparing a Digital Asset Basic Act that would introduce no-fault damage compensation for digital asset service providers and a bankruptcy risk ring-fencing framework for stablecoin issuers, a report said on Dec. 30. The draft would require stablecoin issuers to hold reserve assets such as deposits and government bonds, place funds of at least 100% of outstanding issuance with banks or similar custodians, and permit digital assets to be sold domestically with stronger disclosure rules. The Financial Services Commission and the Bank of Korea reportedly remain divided over who can issue stablecoins, approval processes, minimum capital requirements and whether exchanges may both issue and list such assets, with the government bill now expected to be submitted next year.