Government Stablecoin Plan Strengthens Investor Protection, Including No-Fault Liability

Yonhap News reported that the government's currently drafting Basic Digital Asset Act (Phase 2 Virtual Asset Bill) includes investor protection measures, such as strict liability for damages on digital asset operators and insulating stablecoin issuers from bankruptcy. The media outlet explained, "It is expected to include measures such as requiring stablecoin issuers to manage reserve assets in deposits and government bonds and deposit or entrust at least 100% of the issued balance to a bank or other management institution; imposing explanation obligations, terms and conditions, and advertising regulations on digital asset operators at a level similar to that of the financial industry; and imposing strict liability for damages on digital asset operators in the event of hacking or computer failures in accordance with the Electronic Financial Transactions Act; and allowing domestic digital asset sales on the premise of sufficient information disclosure."