South Korea Digital Asset Act Targets RWAs and Stablecoins

South Korea’s ruling Democratic Party is drafting the “Digital Asset Act” to regulate stablecoins and tokenized real-world assets (RWAs) with clearer rules. The Digital Asset Act aims to reduce legal ambiguity and support more institutional, compliant adoption. For RWAs, blockchain tokens tied to real value would be recognized only if issuers place underlying assets into managed trusts under the Capital Markets Act. This structure is designed to improve verifiable reserves and curb misrepresentation risk. For stablecoins used in cross-border payments, value-stable digital assets would be treated as a recognized payment method under the Foreign Exchange Transactions Act. Firms handling them would fall under foreign-exchange oversight without needing separate registration for every activity, with exemptions possible for smaller routine payments. The Digital Asset Act also tightens stablecoin economics: issuers would be banned from offering any yield to holders (including “interest,” discounts, or reserves framed as returns). In addition, the Financial Services Commission will set interoperability standards across blockchain networks to prevent liquidity fragmentation—especially for won-denominated stablecoins. Disclosure would move toward a unified reporting system managed by an industry association. Notably missing in the current draft are exchange ownership limits and bank-equity requirements for stablecoin issuers, which could be addressed later. For traders, the Digital Asset Act is a catalyst for institutional readiness but may dampen stablecoin yield strategies and influence near-term issuance and market structure.