Digital asset regulations in the spotlight… South Korea interested in Japan's system

In South Korea, regulations on the digital asset market are attracting attention again ahead of the early presidential election in June. During the 22nd National Assembly general election held in April last year, the major political parties voted to support digital assets.
Following the election of President Donald Trump in 2016, the debate on the issue is expected to intensify.
There is also interest in Japan's example, which has established a systemic foundation ahead of other countries. According to industry sources on the 21st, Japanese financial authorities have decided to implement the measures based on the results of a large-scale virtual asset exchange hacking incident that occurred in the past.
Since then, the Financial Services Agency of Japan has revised the Payment Services Act and the Financial Instruments and Exchange Act, and has been working to improve systems related to digital assets.
This is a sign of change, with the government even considering approval of virtual currency exchange-traded funds (ETFs).
The government is currently discussing the policy. This has raised expectations that the Japanese authorities will approve a Bitcoin spot ETF. According to industry sources, the Japanese financial authorities will approve a virtual currency ETF by the end of June.
The government plans to announce a bill to reform the asset-related system. With Japan taking the initiative in developing its system, there are growing calls for South Korea to also speed up its own systemic response.
Digital assets are generally referred to as security tokens, stable coins, and virtual assets.
In Japan, security tokens are subject to the Financial Instruments and Exchange Act, and there are many cases of tokenization of stocks, bonds, real estate income securities, etc. led by major financial institutions.
Stable coins are managed in accordance with the Banking Act, the Payment Services Act, and the Trust Business Act, while crypto assets are managed in accordance with the Payment Services Act.
As Japan takes the lead in developing the system, South Korea has also made digital asset policy a campaign pledge for the presidential election.
Some have called for candidates to make digital asset-related policies a major part of their agendas.
In fact, during last year’s general election, the Democratic Party of Korea said it would not regulate digital assets.
He pledged to strengthen the autonomous foundation of the digital asset ecosystem, △reorganize the virtual asset system, △incorporate the rights of linked products such as allowing Bitcoin spot ETFs, and △promote the legalization of token securities.
In particular, the promises related to token securities include: △ bringing assets that were not traded in existing securities into the system, activating small investments (dividual investments) to foster new industries, △ separating issuance and distribution.
Under the rules, measures have been put in place to increase fund-raising and liquidity through the revitalization of over-the-counter distribution platforms, and to strengthen investor protection through fair valuation of underlying assets and clarification of rights.
With policy discussions regarding digital assets once again coming to the surface following the presidential election in June, attention is also focused on the direction of regulation in the Korean domestic market in line with the trend toward developing global systems.
An industry source said, "If Korea does not establish a preemptive system for the digital asset market like Japan, from token securities to virtual assets and stapled coins, it may lose its competitiveness in the global market.
"We need a concrete roadmap for political rights that goes beyond the presidential pledges and leads to actual legislation and implementation of systems," he said.