[TokenPost Column] Will the 2026 secondary legislation on digital assets by the Lee Jae-myung government prove their sincerity in "financial innovation"?

By 2026, South Korea’s digital asset industry will have crossed an irreversible river. The market, long sidelined by a “regulatory vacuum,” will enter its true founding year rooted in the “institutional sector.”

Uncertainty factors that have disrupted the market in recent years will be incorporated into the legal framework, and the entire industry is expected to introduce a robust licensing system. Currently, the Lee Jae-myung government faces a major task of calming previous chaos through secondary legislation and establishing a healthy market order.

Predators in the shadows, now have nowhere to hide

For a long time, virtual asset consulting, entrusted management, and promotion businesses have exploited legal ambiguities to make investors cry, but they will finally be brought into formal regulatory oversight. Once secondary legislation is completed, they will have no loopholes left to hide in.

This is not just about issuing licenses to industry players. It is about imposing strict compliance monitoring obligations on market participants and providing solid protection for investors suffering from disorderly business practices—“justice realized.” The government should not make immature compromises in this process but should decisively eliminate unqualified practitioners to ensure market transparency.

A seismic shift in the issuance market—opportunity or monopoly?

Regulatory reforms will fundamentally change the landscape of the virtual asset issuance market. With the legal approval of utility tokens and stablecoins, market-making and resale activities that previously took place in the shadows will now be under transparent regulatory oversight.

Of particular concern is the stablecoin market. It is highly likely to reorganize around large enterprises capable of bearing substantial reserves. Additionally, global giants licensed overseas are also eyeing the Korean market with keen interest. While the government will set strict entry barriers such as establishing domestic branches, this should not become a basis for discrimination against domestic companies or hinder healthy competition. It is the government’s responsibility to lay the foundation for our enterprises to survive amid fierce competition.

“Exclusive regulation” is a path to mutual destruction

The most worrying aspect is the securities token market. Securities tokens will be subject to the Capital Markets Act and will face strong regulation comparable to existing financial investment products. As a legal professional, I warn: this strictness must not become a “Galápagos-style regulation” unique to Korea, disconnected from global trends.

The virtual asset market is fundamentally about pursuing a borderless digital economy. If the world is racing forward while we cling to outdated standards of the Capital Markets Act to restrain innovation, Korea’s STO industry will lose competitiveness from the start and be eliminated. Financial authorities must remember that the purpose of regulation should not be to drain the industry.

Now, the government must respond

2026 is a critical period where the bright prospects of institutional implementation intertwine with the shadows of overregulation and isolation. The blockchain and Web3 industries have already been actively responding to these changes.

Now, the ball is in the government’s court. The Lee Jae-myung administration should go beyond mere management and supervision, implementing intelligent regulatory policies that stimulate industry vitality. Achieving impeccable investor protection and bold industry cultivation—grasping these two goals—will be the true test of the current government’s commitment to financial innovation. We strongly urge against repeating the mistake of stifling innovation with outdated regulation.