|

South Korea’s Stablecoin Bill Faces Dec. 10 Deadline – or Lawmakers Act Alone

South Korea’s long-running effort to construct a stablecoin regulatory framework has reached a decisive second, with lawmakers setting a agency December 10 deadline for the federal government to ship a draft invoice.

If regulators miss that date, key legislators say they may transfer forward on their very own, ending months of stalled negotiations over how a won-pegged stablecoin ought to be issued and who ought to be allowed to manage it.

Seoul Divided Over Whether Banks or Tech Firms Should Lead Stablecoin Issuance

According to studies from Seoul, the ruling get together issued what it described as a closing discover to monetary authorities, urging them to submit the federal government’s proposal for the so-called “Phase 2 Legislation on Digital Assets,” which focuses particularly on stablecoin oversight.

Source: MK News

Political and monetary officers held a closed-door assembly on the National Assembly on December 1, the place the most important level of competition resurfaced: whether or not banks should take the lead in issuing stablecoins or whether or not know-how companies ought to be allowed a extra lively position.

Some lawmakers have argued for a minimal 50% financial institution stake, citing the Bank of Korea’s long-standing warnings that privately issued digital gained tokens might have an effect on financial coverage and destabilize the monetary system.

Others, together with components of the ruling get together and the Financial Services Commission (FSC), want reducing the barrier to permit fintech participation, saying extreme restrictions might restrict innovation.

The FSC later issued a public assertion clarifying that no closing choice had been made on whether or not a consortium or a 51% financial institution stake could be permitted.

The regulator confirmed that stablecoin laws was mentioned throughout Monday’s coverage session and that each side agreed to organize a authorities invoice as quickly as attainable.

However, specifics stay unsettled, prolonging a delay that has already pushed anticipated timelines a number of occasions.

This debate has taken on broader urgency as rival political events race to introduce their very own drafts.

The National Assembly’s Political Affairs Committee is at present reviewing three separate payments, every proposing guidelines for issuance, collateral administration, inner controls, and minimal capital necessities of about 5 billion gained.

The payments differ on points akin to whether or not stablecoin issuers ought to be allowed to supply curiosity on holdings, reflecting ongoing disparities in coverage route.

New AML and Travel Rule Measures Add Pressure to South Korea’s Stablecoin Push

The stress is additional intensified by parallel regulatory developments throughout authorities. The Financial Intelligence Unit is reorganizing its anti-money laundering protocols for stablecoins and making ready analysis that can form future AML tips.

South Korea can also be shifting toward a tighter travel rule regime, with plans to increase reporting necessities to transactions beneath 1 million gained to stop customers from bypassing identification checks.

Authorities have indicated that enhanced KYC guidelines and stricter oversight will accompany any new stablecoin system.

Meanwhile, the Bank of Korea has expressed contemporary considerations. In an October report, the central bank warned that improperly collateralized stablecoins might set off depegging occasions and disrupt capital stream administration.

It argued once more that solely regulated monetary establishments ought to challenge stablecoins, stressing that non-bank issuers might successfully have interaction in deposit-like actions with out the safeguards banks should comply with.

Despite regulatory disagreements, the home market is already shifting forward. Naver Financial has completed development of a stablecoin pockets for Busan’s Dongbaek-jeon program, which is able to convert the town’s pay as you go native forex right into a blockchain-based token.

KakaoBank has begun building infrastructure for a KRW-denominated “Kakao Coin,” indicating rising company curiosity in digital gained merchandise. Major banks have additionally explored a consortium-issued stablecoin focused for late 2025 or early 2026.

These developments present why lawmakers are decided to fulfill the present legislative window.

However, the regulatory uncertainty mirrors other delays in South Korea’s digital asset agenda, together with the nation’s digital asset taxation regime.

Despite being permitted in 2020, Korea’s crypto tax legislation has been postponed a number of occasions and stays scheduled for 2027, with most of the required techniques nonetheless incomplete.

South Korea has fallen behind main economies such because the United States, the European Union, and Japan, all of which have already formalized stablecoin constructions.

Industry teams warn that additional delays might weaken competitiveness, particularly as dollar-based tokens like USDT proceed to dominate world markets.

The put up South Korea’s Stablecoin Bill Faces Dec. 10 Deadline – or Lawmakers Act Alone appeared first on Cryptonews.

Similar Posts