Amid US Digital Asset Dominance, ‘Won Sovereignty’ at Risk… “Urgent Need for Digital Asset Basic Act”

Beyond Market Maintenance: Expansion of ‘Dollar Hegemony’
Rising Concerns Over Deepening Subordination in Korea’s Market
Need to Move Away from Bank Ownership Ratio Regulation

As the United States moves forward with concrete legislative action in the digital asset sector, South Korea faces a critical crossroads: Will it emerge as a "regulation-exporting country" with independent digital regulatory authority, or will it become a "regulation-importing country" subjugated to the U.S.-led digital order? With the likelihood of U.S. regulatory standards being exported beyond its borders, there are urgent calls for the rapid enactment of Phase 2 of the Digital Asset Basic Act to protect the sovereignty of the Korean won.

Min Byungduk, member of the Democratic Party of Korea. Photo by Yonhap News Agency

Min Byungduk, a member of the Democratic Party of Korea, stated at the "2026 Second Half Legislative Outlook Seminar" for the U.S. congressional delegation held at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul on July 15, "The United States is moving quickly and strategically to reinforce dollar hegemony. While it might appear, on the surface, to be simply a consolidation of digital asset regulations, at its core, it is about expanding financial order into the digital realm." He stressed, "The first payment network to be established becomes the standard, capturing data, fees, and industry leadership. We need to expedite discussions on a won-based stablecoin. Without a won-based stablecoin, dollar stablecoins could quickly dominate our market."

Min Kyu Park, also a member of the Democratic Party of Korea, remarked, "What we witnessed on-site in the U.S. is that digital assets are being handled as part of the national strategy to bolster dollar dominance. In particular, they view corporate growth and innovation as central to legislation, focusing policy so that companies can freely conduct business in the U.S. They see digital assets as the future of the financial industry and a core of national competitiveness." He went on to add, "In Korea, discussions about stablecoins are still at a very early stage," he said. "After the Democratic Party convention, I will ask for the rapid formation of a digital asset task force, and through cooperation with the government, I hope to see a bill formally introduced by September."

Oh Sejin, Chair of the Digital Asset Exchange Alliance (DAXA), commented, "What is most needed now is regulatory clarity. With ongoing debate on the next phase of legislation following the Virtual Asset User Protection Act, fully understanding the trends in U.S. digital asset regulation and drawing insights from them is crucial." He added, "Recently, there has been a trend of convergence between the traditional financial sector and digital asset exchanges, highlighting the growing need for regulatory improvements to create synergy between traditional finance and the digital asset market."

Yushinjae, CEO of The Asset, and Min Kyu Park, a member of the Democratic Party, are holding a dialogue at the '2026 Second Half Legislative Outlook Seminar' hosted for the U.S. Congressional Delegation on the 15th at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul. Photo by Chunhan Lim

Han Seohee, a lawyer at Kwangjang Law Firm, gave a presentation on trends in U.S. digital asset legislation and analyzed its impact on the domestic digital asset market. Han explained, "The U.S. digital asset legislation operates with a dual strategy of not only reorganizing the market, but also globally expanding the dollar-based digital financial order and effectively turning U.S. regulations into international standards. The crux of the impact on Korea is a greater subordination of the domestic digital asset industry and traditional finance to a U.S.-centric standards system."

Examining the U.S. legislative landscape, the Clarity Act is currently stalled from being tabled due to three issues: ethics provisions, protection of DeFi developers, and stablecoin rewards—resulting in a failure to secure the 60 votes required to break a filibuster (with at least 7 Democratic votes needed). The session before next month’s recess is effectively the last window for its passage. Should it fail, there are concerns that the momentum for legislation could fade ahead of the November midterm elections.

For the Genius Act, enacted in July last year, eligible issuers are defined variously as subsidiaries of deposit-taking institutions, federally qualified issuers licensed by the Office of the Comptroller of the Currency (OCC), including non-banks, and state-qualified issuers. All issuers must meet requirements for 1:1 reserves, redemption rights, a prohibition on interest payments, and compliance with AML and sanction regulations. Notably, the act incorporates a provision recognizing foreign issuers, specifying that the regulatory frameworks for issuers outside the U.S. are reviewed against U.S. standards.

Han Seohee, a lawyer at the law firm Kwangjang, is giving a presentation at the '2026 Second Half Legislative Outlook Seminar for the Congressional Delegation Visiting the U.S.' held at Hotel Naru Seoul M Gallery in Mapo-gu, Seoul on the 15th. Photo by Im Chunhan

U.S. digital asset legislation is expected to have a significant impact on Korea’s domestic market. Key issues include: the penetration of dollar stablecoins into the domestic market, changes in the banking industry’s revenue structure and new business opportunities; the outflow of stablecoin liquidity from the virtual asset sector to banks and other parties, raising customer asset protection standards; and the growing need to open institutional and corporate markets for trade settlement purposes.

As a result, the enactment of a legal framework for stablecoins as payment and settlement infrastructure, as well as industrial strategies and easing of network separation regulations for the banking and financial sector, have emerged as core challenges. In addition, there were suggestions that Korea should allow tokenization of equity and debt securities to attract cross-border fund inflows through security tokens and design systems to encourage foreign individual investor entry. Furthermore, it has become important to adopt an onshoring strategy for the digital asset industry and establish regulatory frameworks for a domestic digital asset-based derivatives trading market.

Kim Jongseung, CEO of MRI, presented specific regulatory tasks that must be included when preparing legislation and subordinate regulations for won-based stablecoins. In particular, he stated that the law should clearly specify powers for the resolution and transfer of failed issuers, and set out supervisory triggers such as insufficient reserve assets or the activation of gates. He also emphasized that resolution funds should be pre-funded by issuers and exchanges and that the cost burden should be adjusted through risk-based differential contributions, fund caps, and reductions in the target accumulation ratio. Moreover, instead of using a bank’s equity stake as the criterion, the key requirement for license approval should be whether the entity is included in the crisis response framework. Additional measures mentioned include: clear designation of access to upper-tier payment networks; transmission mechanisms for secondary market par (the state where a stablecoin maintains a 1:1 value with the dollar); and rules for continuous settlement gates.

This content was produced with the assistance of AI translation services.