South Korea's Democratic Party Launches Digital Asset Committee to Promote Crypto Growth
3min read The largest political party in South Korea, the Democratic Party, has launched a Digital Asset Committee focused on developing cryptocurrency policies and promoting industry growth. The committee held its inaugural meeting at the National Assembly Members’ Hall in Seoul on May 13. During its first meeting, the committee highlighted the importance of resolving regulatory uncertainty and addressing burning issues like stablecoin regulation amid the push for US-dollar stablecoins by the US government.
The new committee joins similar organizations in South Korea, including the Virtual Asset Committee launched in late 2024 and another public-private crypto task force introduced in 2022, both initiated by the Financial Services Commission (FSC). Exchanges like Upbit and Bithumb are involved in the committee's activities. The leadership of the Digital Asset Committee includes South Korean officials and politicians such as National Assembly chairman Min Byeong-deok, who joins the committee as chairman. Additionally, the organization features standing general election committee chairman Yoon Yeo-joon, Muksanism Committee chairman Maeng Seong-gyu, National Assembly member Kim Byeong-gi and former National Assembly chairman Kim Jeong-woo.
The committee will also include participation of executives from major local exchanges, including Upbit, Bithumb, Coinbit and Gopax. At the opening meeting, committee chairman Min expressed concerns regarding limitations of South Korea’s current one-exchange-one-bank rule, implying that crypto exchanges are restricted to collaborating with only one lender. “There are clear shortcomings to the one exchange, one bank principle,” Min reportedly said, adding that the committee is working with regulators to resolve the issue. The chairman also mentioned discussions on which regulators should be responsible for supervising the stablecoin industry and whether stablecoins should be subject to a licensing system or a reporting system.
“There is also a point of contention as to whether the Bank of Korea or the FSC should handle the regulation,” he reportedly said. The news came shortly after a Bank of Korea executive expressed concerns over the issuance of the South Korean won-backed stablecoins. “Stablecoin has a great impact on the implementation of central bank policies such as monetary policy, financial stability, and payment settlement,” Bank of Korea’s Koh Kyung-chul reportedly said at a conference on May 12. “The negative impact on the central bank’s policy implementation should be minimized by the central bank’s practical intervention in the approval stage,” he added.
The Democratic Party of South Korea has taken a significant step towards integrating digital assets into the country's financial landscape by establishing the Digital Asset Committee. This new committee is tasked with developing policies that promote the growth and regulation of the digital asset industry, with a particular focus on modernizing capital markets and transitioning into a digital economy. The committee's formation comes as part of the party's preparations for the upcoming presidential election, highlighting the growing importance of digital assets in South Korean politics.
The Digital Asset Committee will address various aspects of digital asset policies, including the regulation of stablecoins and the potential introduction of virtual asset exchange-traded funds (ETFs). This move is part of a broader effort to create a more robust and transparent framework for digital assets, ensuring that the industry can thrive while protecting investors. The committee's work will be crucial in shaping the future of digital assets in South Korea, as the country seeks to position itself as a leader in the global digital economy.
Both the ruling People Power Party (PPP) and the opposition Democratic Party (DPK) have been revealing crypto-friendly policies to attract the growing population of digital asset investors. The DPK has expressed support for the launch of spot Bitcoin ETFs, emphasizing the party’s dedication to increasing investment possibilities. The PPP has also shown openness to discussing the authorization of spot cryptocurrency ETFs, indicating a bipartisan effort to integrate digital assets into the financial system.
The two parties have different approaches to crypto taxation. The PPP suggests postponing the introduction of a tax on crypto profits to allow for the development of a comprehensive legal framework. In contrast, the DPK favors maintaining the 2025 start date for crypto taxation but proposes increasing the tax-deductible level to reduce the tax burden on small investors. These differing strategies reflect the parties' efforts to balance the need for revenue with the desire to foster growth in the digital asset industry.
South Korea is also advancing legislation aimed at protecting crypto investors. The Virtual Asset Users Protection Act, set to take effect in July 2025, will prohibit insider trading, market manipulation, and other illegal activities in the crypto space. Additionally, the PPP has proposed the creation of a "Digital Asset Promotion Committee" to oversee the development of regulations and penalties related to digital assets. This body will play a pivotal role in shaping the country's crypto regulatory landscape.
