SOUTH KOREA Trends and Developments Contributed by: Ohoon Kwon and Yeon Seo, Cha & Kwon Law Offices
DABA on Hold DABA, by contrast, has been under committee review for almost a year, and is unlikely to be put to a vote until after the local elections in June 2026. Representative Min Byung-deok of the Democratic Party of Korea introduced the DABA on 10 June 2025 as a single statute covering crypto-asset issuance and ongoing disclosure, the licensing of digital asset service providers, market-abuse prohibitions, and – separately – fiat-pegged stablecoins. It was designed as Phase 2 of the framework, building directly on the VAUPA). The most persistent obstacle to passage has been the eligibility of stablecoin issuers, an issue that has dominated committee debate since late 2025. Public policy commentary and media coverage indi- cate that the BOK has favoured a 51% bank-led-con- sortium ownership rule, citing monetary sovereignty, run risk and the integrity of payment settlement. The FSC resisted, arguing the threshold would suppress fintech participation and pointing to the EU’s Markets in Crypto-Assets Regulation (MiCAR), under which most licensed e-money token issuers are electronic money institutions rather than banks. The two posi- tions have not converged, and the disagreement remains the principal reason DABA has not advanced. The Democratic Party’s Digital Asset Task Force announced on 16 April 2026 that DABA had been placed on the Political Affairs Committee’s Legisla- tive Review Subcommittee agenda for 27 April 2026, alongside three competing stablecoin-focused bills introduced separately by other Democratic Party and People Power Party legislators in 2025. The 27 April session was postponed and the subcommittee meet- ing was rescheduled for 12 May 2026. Whether DABA will be placed back on the agenda for the resched- uled session is uncertain, with disagreement on vir- tual asset exchange shareholding restrictions among the unresolved points within the ruling party. All four bills remain under committee review. Negotiations are expected to resume only after the local elections on 3 June 2026. The Task Force is also weighing a differ- ent strategy: pass the consensus parts of DABA first, defer the contentious ones, and treat stablecoin rules
The Capital Markets Act amendment is about the reg- ulated subject. It permits secondary market interme- diation for investment contract securities, the instru- ments used to fractionalise rights in art, livestock, real estate and intellectual property, and introduces a new licensed business category, an over-the-counter (OTC) brokerage, for that purpose. Until now, issu- ers of investment contract securities could only solicit retail investors directly, with no licensed intermediary involved. The amendment now permits broker-dealers to distribute them and act as intermediaries. Music copyrights, content IP and infrastructure interests are commonly cited as the asset classes most likely to benefit, although the scope will depend on subordi- nate regulations that are still being drafted. The two legislative tracks do not depend on each oth- er. An investment contract security can be issued and distributed through a conventional electronic registra- tion ledger without using DLT at all, and the Electronic Securities Act amendment can be used for traditional debt or equity securities without ever invoking the new investment contract framework. “Token security” is the practical label that has emerged where issuers stack the two, but it is not a new statutory category. Substantively, a public offering of a token security still requires registration, ongoing disclosure obligations still apply, and unlicensed brokerage remains illegal. Those subordinate regulations are still being devel- oped. The FSC’s Token Securities Consultative Body, which brings together the FSC, the Financial Supervi- sory Service (FSS), the KSD and other market partici- pants, is refining the technical and operational stand- ards before the 2027 effective date. Several questions that will most affect commercial structuring remain open. The technical criteria for a qualifying distributed ledger have not been set, nor have the rules on when a non-KSD entity may run a node or how much settle- ment may happen off-chain. The capital, governance and record-keeping requirements that will attach to the new OTC brokerage licence are also still under development. Anyone structuring a token security transaction in 2026 should expect the rules to con- tinue changing until close to the 2027 effective date.
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