South Korea's Ruling Party Sets Standards for Tokenization of Physical Assets

South Korea's ruling Democratic Party has introduced a comprehensive bill outlining standards for the tokenization of physical assets. According to PANews, the legislation requires issuers to deposit related assets into a management trust in accordance with capital market laws, with specific details to be determined by presidential decree. The bill also addresses stablecoins, stipulating that if used for foreign exchange transactions, they will be considered a payment method under foreign exchange laws, automatically falling under the supervision of foreign exchange management without the need for additional registration. For everyday consumer payments, stablecoins are exempt from reporting obligations. Furthermore, the legislation prohibits stablecoin issuers from paying interest to holders under any circumstances. The Financial Services Commission is tasked with developing interoperability technical standards for stablecoins to prevent liquidity fragmentation when Korean won stablecoins are issued across multiple chains. Additionally, the bill proposes integrating exchange and decentralized disclosure systems into a unified disclosure system under the digital asset industry association.