Asia Policy Watch: China's central bank law draft proposes to clarify digital yuan legal status; Korea delays digital asset basic act
What Happened
On June 24, 2026, two significant policy developments emerged in Asia. First, China's revised "People's Bank of China Law (Draft)" was submitted for first review to the 24th session of the 14th National People's Congress Standing Committee on June 23, which explicitly proposes to clarify the legal status of the digital yuan (e-CNY). This is a notable upgrade from the 2020 draft that only stated "RMB includes physical and digital forms." The new draft also reiterates prohibitions on creating or selling token tickets and digital tokens to replace RMB in circulation, with penalties including fines up to five times the illegal amount. Second, Korea's "Digital Asset Basic Act" (DABA) faces potential shelving this year as the legislation, which represents the second phase of virtual asset regulation, has stalled. Despite the National Assembly's digital asset task force having integrated eight related bills, the task force has become inactive following recent parliamentary leadership changes, and the government has not submitted its own bill version. Observers note the delay may be linked to authorities' focus on boosting the stock market, as the KOSPI index surpassed 9,000 points, to prevent capital outflow to crypto markets.
The Policy Signal
China's move signals a formalization of the digital yuan's role within its monetary framework, reinforcing its centrality in the future of payments and financial infrastructure. This clarifies the e-CNY's legal standing, potentially paving the way for wider adoption and integration with traditional finance. For Korea, the stalling of the DABA indicates a regulatory pause, possibly driven by competing economic priorities. It suggests that while framework legislation exists (the Virtual Asset User Protection Act already in force), comprehensive systemic regulation for digital assets may be delayed, leaving Korea's crypto market in a state of partial oversight. Together, these reflect a divergence in regional regulatory momentum: China pushes forward its state-backed digital currency, while Korea hesitates on broader crypto market legislation.
Who Is Affected
| Group | Impact |
|---|---|
| Digital yuan ecosystem partners (banks, payment providers, tech firms) | Enhanced legal certainty may accelerate integration and development of e-CNY use cases, but also reinforces the ban on private digital tokens, limiting parallel crypto markets. |
| Korean cryptocurrency exchanges (e.g., Upbit, Bithumb) | A delayed comprehensive framework prolongs regulatory uncertainty, potentially stifling innovation and institutional participation while existing platforms operate under interim measures. |
| Stablecoin issuers and RWA tokenization platforms considering Korean market expansion | Without a full legal structure for security tokens and stablecoins, entry strategies may be postponed, affecting project timelines and investment. |
| Global crypto payment companies targeting cross-border e-CNY solutions | Clarified legal status could spur interest in integrating digital yuan with global payment rails, but must navigate strict Chinese controls. |
| Korean institutional investors and blockchain projects | Delayed legislation may limit access to regulated digital asset products, driving them to offshore or unregulated alternatives. |
What to Watch Next
For China, monitor the legislative progress of the PBOC Law revision – how it defines digital yuan usage, privacy, and interoperability with other payment systems. Implementation implications for foreign businesses and tourists (e.g., the recent TenPayGo app) will be key. For Korea, watch for the formation of the relevant standing committee and any government-submitted bill; a prolonged delay could impact Korea's competitiveness as other Asian hubs advance their frameworks. Also note Korea's FIU action in the same day, referring about 40 unregistered virtual asset service providers to law enforcement, signaling continued enforcement despite legislative delays.
PANews View
China's legislative move on the digital yuan is a strategic step to anchor its CBDC in law at a time when global private stablecoin adoption is accelerating. This aligns with broader trends in Asia where jurisdictions like Singapore, Japan, and Hong Kong are developing clear frameworks for both CBDCs and private digital assets, albeit with different philosophies. Korea's legislative stall, however, puts it at risk of falling behind in the regional race to provide regulatory clarity. The political calculus of prioritizing equity markets over crypto regulation may backfire if capital and talent seek friendlier shores. Practically, businesses operating in Asia must navigate a patchwork: China's state-centric digital currency path, Korea's uncertain legislative environment, and more developed markets like Singapore and Hong Kong. For crypto service providers, the immediate focus should be on compliance with existing laws like Korea's VASP registration and China's strict prohibition on private token trading, while preparing for a more differentiated regional landscape.
