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For companies waiting to enter the Korean digital asset market through a single, unified statute, 2026 has been a year of recalibration. The Korea Digital Asset Basic Act (디지털자산기본법, “DABA”) — originally envisioned as Phase 2 of Korea’s crypto framework — remains stalled in the National Assembly. At the same time, two of its most consequential components are moving on their own. Tokenized securities legislation has already passed. Stablecoin rules are now being carved out for potentially separate consideration.
The result is a regulatory landscape where the “basic act” is no longer the first-mover. Understanding which tracks are advancing, and which remain frozen, is essential for any business planning Korean market entry or product launches in 2026 and 2027.
The Current Status: DABA Delayed Into Late 2026
DABA was introduced by Representative Min Byung-deok (Democratic Party of Korea) on June 10, 2025. The bill proposed a comprehensive framework covering digital asset definitions, licensing of digital asset service providers, issuance procedures, disclosure obligations, unfair trading prohibitions, and a separate regulatory regime for asset-referenced digital assets (stablecoins).
Passage stalled in late 2025 over one central dispute: who should be authorized to issue Korean won-pegged stablecoins. The Bank of Korea (BOK) pushed for a rule limiting issuance to bank-led consortiums holding at least 51% ownership. The Financial Services Commission (FSC) warned that such a rule would suppress fintech participation and cited the EU’s MiCA framework, where the majority of licensed stablecoin issuers are electronic money institutions rather than banks. Neither side moved.
On April 16, 2026, the Democratic Party’s Digital Asset Task Force announced that DABA will be placed on the National Assembly’s Political Affairs Committee Legislative Review Subcommittee agenda on April 27, 2026, but that substantive negotiations will begin in earnest only after the local elections on June 3, 2026. Passage within 2026 remains possible but is not guaranteed. Full implementation, which requires subordinate regulations, is unlikely before 2027.
The STO Track Has Already Moved
While DABA waited, the tokenized securities (“STO”) track advanced independently. On January 15, 2026, the National Assembly passed amendments to the Electronic Securities Act (전자증권법) and the Financial Investment Services and Capital Markets Act (자본시장법, “FSCMA”). The amendments take effect approximately one year after promulgation, meaning around January 2027.
Three features of the STO amendments matter for foreign businesses:
First, a “token security” is not a new category of security. It is a new form of issuance for existing FSCMA securities — debt securities, equity securities, beneficiary certificates, and investment contract securities. Standard capital markets regulation applies. Public offerings still require a securities registration statement. Unlicensed brokerage remains illegal.
Second, distributed ledgers are now recognized as legally valid electronic registration ledgers. Issuers meeting statutory requirements may record rights directly on a blockchain network, with the electronic registration institution (KSD) participating as a node.
Third, the FSCMA amendment permits broker-dealer distribution of investment contract securities (투자계약증권). Previously, issuers could only distribute these instruments through direct investor solicitation. The amendment opens secondary market intermediation, which is expected to significantly expand fractional investment products tied to art, livestock, real estate, and intellectual property.
The key point: STO infrastructure is proceeding on its own timetable, separate from the DABA schedule. Businesses planning token-based securities products in Korea should prepare for the 2027 effective date rather than wait for DABA.
Stablecoin Legislation May Become Its Own Track
The stablecoin question — the same question that stalled DABA — is now being considered for standalone legislation. Following the nomination of Shin Hyun-song as BOK Governor and early indications of a more receptive stance toward stablecoin issuance, the Democratic Party confirmed on April 16, 2026 that it is evaluating a strategy of passing consensus provisions first and deferring contentious items. Stablecoin-specific legislation, separated from the broader DABA framework, is one option under active consideration.
Substantive disagreements remain on two issues. The 51% bank ownership cap has not been resolved. Restrictions on major shareholders of virtual asset exchanges are also unsettled. Even if stablecoin rules proceed separately, those structural questions will determine market entry pathways for foreign issuers such as Circle and Tether.
The earlier FSC draft proposal contemplated allowing foreign-issued stablecoins in Korea only where the issuer holds a Korean license and maintains a local branch or subsidiary. If that structure survives into enacted law, foreign stablecoin issuers seeking Korean market access will need to plan for a local establishment rather than relying on cross-border distribution alone.
Why the Tracks Diverged
The split reflects practical legislative reality rather than coherent policy design. Token securities enjoyed broad cross-party support because they operate within the existing FSCMA framework and involve the familiar dispute between traditional financial institutions and the fintech sector only at the margins. The amendments did not require redrawing regulatory jurisdiction.
DABA, by contrast, directly implicates monetary sovereignty and the allocation of authority between the BOK and the FSC. Stablecoins backed by the Korean won touch payment settlement, reserve management, and, potentially, the BOK’s monetary policy transmission. Disagreements at that level cannot be resolved through technical drafting alone.
The consolidation challenge is also procedural. Multiple lawmakers have introduced competing digital asset bills, and the Democratic Party has been working to merge them into a single government-aligned text. That process has not concluded. Until it does, committee-level deliberation cannot produce a unified bill for floor consideration.
What This Means for Foreign Businesses
Three practical conclusions follow.
First, do not treat DABA as the gating event for Korean market entry. Compliance planning should proceed based on the statutes actually in force — the Virtual Asset User Protection Act (VAUPA) and the revised Specified Financial Information Act (특정금융정보법) — together with the STO amendments taking effect in 2027.
Second, treat stablecoin market entry as a separate regulatory question. Whether stablecoin rules are enacted as part of DABA, as standalone legislation, or through a combination of both, the eligibility criteria will likely require Korean licensing and local presence for foreign issuers. Early structuring decisions, particularly on corporate form and reserve custody, should be made with that expectation.
Third, the STO framework is the most concrete near-term opportunity. Businesses structuring tokenized real estate, art, or revenue-share products should engage with Korean counsel now rather than after the January 2027 effective date. The FSC’s “Token Securities Consultative Body” is expected to begin refining subordinate regulations and infrastructure standards in early 2026, and industry input during that period will shape how issuance and distribution operate in practice.
At Cha & Kwon Law Offices, we advise foreign digital asset businesses, fintech companies, and investors on Korean regulatory strategy across the VAUPA, FSCMA, STO amendments, and pending DABA framework. We help clients sequence licensing, market entry, and product launches in a legislative environment that is moving on multiple tracks at different speeds.
Related reading: Korea Passes STO Legislation, Fueling Expectations for Tokenized Securities Market Growth — How the tokenized securities amendments were enacted and what they mean for issuers.
Related reading: FSC Rejects Bank of Korea’s Stablecoin Emergency Powers — The stablecoin issuer eligibility dispute that stalled DABA.
Related reading: Where Korea Stands on Crypto Regulation in 2026: A Legal Overview — A comprehensive overview of Korea’s current crypto regulatory framework.
Related reading: Korea’s Digital Asset Basic Act: What’s In and What’s Still Being Debated — Part 2 of our six-part series providing a section-by-section breakdown of DABA’s key provisions.
Cha & Kwon Law Offices advises virtual asset businesses, fintech companies, and foreign investors on Korean regulatory compliance. For consultation, contact us at contact@chakwon.com or visit chakwon.com.
This article provides general legal information and does not constitute legal advice for your specific situation. Please consult qualified Korean legal counsel regarding your particular circumstances.
