Is Korea Falling Behind Again?...CLARITY Act Marks a Turning Point for Bitcoin and Digital Asset Regulation in the U.S. [Invest&Law]

Redefining Digital Assets: Commodity vs. Security
SEC Lowers Barriers for Decentralized Finance
Korea Faces Delays on Basic Law and Stablecoin Legislation

As the U.S. Congress prepares to pass the CLARITY Act, which will establish a regulatory framework for digital assets, the U.S. Securities and Exchange Commission (SEC) has issued guidance on decentralized finance (DeFi). This move presents a proactive approach to regulation ahead of the legislation. As a result, there is analysis that the criteria for categorizing digital assets as either commodities or securities will become clearer, leading to a comprehensive restructuring of the market.

"Commodity or Security?"... How the CLARITY Act Is Changing Market Structure

According to the securities industry on April 22, the CLARITY Act introduces a system that classifies digital assets into three categories: digital commodities, investment contract assets, and stablecoins (coins pegged to the value of fiat currency).

Kim Kyungtae, a researcher at SangSangin Securities, explained, "The digital asset tri-classification system is likely to shift the market structure toward a Commodity Futures Trading Commission (CFTC)-centric model, and the previous SEC-oriented interpretation of coins as securities will be rolled back." Accordingly, major assets such as Bitcoin and Ethereum are expected to be classified as "commodities" and fall under the jurisdiction of the CFTC.

Debates surrounding stablecoins are also being resolved. While interest based on deposits will be banned, a tentative agreement has been reached to allow rewards based on activities such as staking and lending.

Kim noted, "With the interest issue now addressed, the remaining variable is only the confirmation of the amendment review schedule. If the bill is put to a vote, it could proceed to a presidential signature." Even after the bill passes, further refinement of the enforcement decrees will be necessary, so the practical application of major regulations is expected to begin next year or later.

Meanwhile, since last year, the U.S. has already enacted and begun implementing the GENIUS Act, which regulates stablecoins. This law stipulates requirements for reserves and sets up a licensing system for issuers.

SEC's 'Preemptive Measures' Ahead of Legislation

The SEC has announced that broker-dealer licenses will not be required for transactions based on self-custody wallets. Hong Seongwook, a researcher at NH Investment & Securities, explained, "If it is a self-custody wallet and does not solicit securities trading, there is no need for a broker-dealer license. This guidance is expected to spur growth in wallet and DeFi services."

A self-custody wallet is a method of storing and managing digital assets directly, meaning that if users control their assets and the platform does not promote investments, existing securities regulations will not apply.

Recently, expectations have also been reflected in the market, with the prices of digital assets rebounding and related companies' stock prices seeing even greater gains. Kim assessed, "If regulatory uncertainty is resolved, offshore liquidity is likely to flow back into the U.S. market."

In Korea, 'Legislative Gridlock'... Delays in Basic Law and Stablecoin Legislation

In contrast, Korea has not been able to accelerate institutional reforms. The National Assembly is discussing both the Digital Asset Basic Act and the won-based stablecoin bill in parallel, but legislative progress is delayed due to disagreements over key issues.

The Digital Asset Basic Act provides the basic framework for exchange regulation and investor protection, while the stablecoin bill is a follow-up law that defines issuers and payment functions. In particular, the stablecoin bill is mired in policy disputes among authorities over a bank-centered issuance structure (with banks holding at least 50% plus one share of equity).

The legislative timeline is also uncertain. The bills remain at the standing committee stage, and most observers expect little chance of passage in the first half of the year. In the meantime, financial holding companies and major information technology firms are moving forward with building stablecoin issuance and payment infrastructure, while the Bank of Korea is also conducting experiments with central bank digital currency (CBDC).

Choi Yoon Young, a researcher at Hanwha Investment & Securities, stated, "In Korea, while private and global issuers are rapidly expanding stablecoin-related businesses and demonstrations, regulatory reform is lagging. The widening gap between the pace of the market and regulation is becoming the key risk."

This content was produced with the assistance of AI translation services.