[Edaily Marketin YunJi Kim Reporter] It has been determined that the controversy surrounding the Framework Act on Digital Assets has expanded beyond the structure of the provisions to the stage of defining the law’s scope. Critics point out that detailed regulations were established without first sufficiently clarifying the concept of what the law is intended to regulate.

It is reported that during a recent closed-door advisory meeting, opinions were raised that the legal nature of the assets and the scope of the market must first be clarified. Concerns have been raised that if the definitional framework remains unstable, the licensing, supervision, and enforcement structures could also be adversely affected.

“Is it an asset or a token?”… Conflicts Start with Legal Nature

According to the draft Digital Asset Framework Act and the advisory committee’s review comments obtained exclusively by Edaily on the 27th, it was confirmed that issues regarding how to define digital assets were raised at a recent closed-door advisory meeting.

While the draft defines digital assets as “electronic tokens that can be electronically transferred and stored using distributed ledger technology,” it simultaneously presupposes “economic value.” Simply put, they are tokens in form but assets in substance.

It is reported that several advisory committee members pointed out that legal effects could vary depending on whether the token itself possesses independent value or serves merely as a means of representing a separate underlying asset. They explained that the structure differs between types where the token itself constitutes economic value—such as Bitcoin—and RWA (Real-World Asset-backed tokens), which tokenize physical assets.

They expressed concern that failing to clearly distinguish between the asset nature and the representative nature of a token could lead to interpretive conflicts in subsequent regulations, such as the establishment of collateral and the identification of assets subject to enforcement. Accordingly, some advisory committee members reportedly suggested that it would be more coherent to center the definition on the asset and use the concept of a token as a supplementary element when necessary. This is based on the judgment that failing to distinguish between substance and form could destabilize the scope of regulation itself.
Confusion

Over Market Definition… Ambiguity in Stablecoin Classification The definition of the digital asset market also

emerged as a point of contention. Advisory committee members reportedly viewed the concept of the market as not having been consistently defined in both the definitional provisions and the regulatory framework of the main text.

The scope of the market serves as the criterion for determining which entities require authorization and where supervisory authority lies. The scope of regulation varies depending on what is considered part of the market. It has been pointed out that dividing the industry into sectors without first defining the market scope could lead to repeated conflicts of interpretation during the implementation phase.

For example, the industry points out that the scope of regulation could vary significantly depending on whether platforms that function as exchanges are included, or whether simple brokerage or over-the-counter (OTC) transactions are also covered. In this regard, it is reported that many advisory committee members expressed the view that the design of the supervisory framework itself could become unstable unless the scope of the market is first defined. They explained that if industry sectors are divided and obligations are imposed while the definition of the market remains ambiguous, there is a high likelihood of recurring conflicts of interpretation during the implementation phase.

Issues regarding the classification of stablecoins were also raised. The draft defines stablecoins as either “value-stable” or “payment-purpose value-stable.” However, it is unclear whether the provisions clearly differentiate the reserve asset requirements or licensing requirements between the two types. Advisory committee members reportedly pointed out that if the definitions are bifurcated, the regulatory framework should also differ structurally; however, the current text does not clearly reflect these differences.

The phrase “in lieu of currency” in the definition of stablecoins also sparked controversy. The draft defines value-stable digital assets for payment purposes as “those that can be used in lieu of currency for payments among an unspecified number of people,” but some advisory committee members pointed out that this phrasing could be interpreted as requiring substitutability for legal tender. They explained that if the definition is read as presupposing not merely a means of payment but also the function of replacing currency, the scope of the definition could be unnecessarily expanded.

An official in the National Assembly familiar with the matter stated, “A small difference at the definition stage can lead to a significant difference at the supervision and enforcement stages,” adding, “Before debating the intensity of regulation, we need to clearly define the basic concepts.”