South Korea's ruling party, led by President Lee Jae-myung, is advancing legislation known as the Digital Asset Basic Act, which would allow local stablecoin issuance and promote competition in the crypto sector. The bill requires local companies to have a minimum equity capital of 500 million won ($368,000) and mandates that stablecoin issuers guarantee refunds through reserves and obtain regulatory approval from the Financial Services Commission. This move comes as South Korean trading of US dollar stablecoins surged to 57 trillion won ($42 billion) in the first quarter. The legislation aims to enhance transparency and support the country's growing crypto market, with over 18 million citizens reportedly participating. Despite these ambitions, the Bank of Korea is opposing the stablecoin initiative, citing concerns over potential impacts on monetary policy effectiveness. Meanwhile, shares of crypto-related companies, such as KakaoPay, have seen a significant rally, although analysts caution that the gains may not be justified given the uncertainty surrounding the new policy.

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