|

South Korea Misses Stablecoin Bill Deadline — Banks vs. Innovation Battle Heats Up

🇰🇷

South Korea’s effort to legalize won-pegged stablecoins has hit one other setback after the nation’s prime monetary regulator missed a government-imposed deadline, exposing a deepening energy wrestle between monetary authorities over who ought to management the following section of digital finance.

Earlier this month, the ruling Democratic Party asked the Financial Services Commission to submit a draft stablecoin invoice by December 10, fulfilling President Lee’s marketing campaign pledge to create a authorized framework for digital belongings.

That deadline handed with no submission.

Stablecoin Disagreement Holds Up South Korea’s Crypto Bill

The South Korean media outlet Newsis reported that FSC later confirmed it was unable to ship the proposal on time, saying it wanted extra coordination with different companies.

A spokesperson mentioned the regulator would as a substitute launch the federal government’s place publicly alongside its formal submission to the National Assembly, citing the general public’s proper to grasp the framework being proposed.

The FSC mentioned it’s making ready a draft tentatively titled the Basic Digital Asset Act, additionally described as Phase Two of South Korea’s digital asset laws.

Officials count on the proposal to be launched later this month or early subsequent month, forward of a consolidated invoice the ruling social gathering has pledged to introduce in January 2026 beneath President Lee Jae-myung’s election commitments.

Behind the delay is an unresolved dispute between the FSC and the Bank of Korea over who ought to lead stablecoin issuance.

The central financial institution has argued that stablecoins perform equally to forex and deposit-like devices and may subsequently stay beneath financial institution management.

It has pushed for a rule requiring home banks to carry a minimum of a 51% stake in any stablecoin-issuing entity, together with inspection powers and veto authority over approvals.

The FSC has resisted that strategy, pointing to abroad fashions, noting that the majority issuers beneath the European Union’s MiCA framework are non-bank digital asset corporations and that Japan’s first yen-linked stablecoin was issued by a fintech firm.

FSC officers have mentioned bank-led issuance lacks world precedent and will restrict participation by know-how corporations that already function digital fee infrastructure.

Negotiations between the FSC and the BOK stay ongoing. Officials conversant in the talks say a compromise might contain versatile possession thresholds based mostly on enterprise scope, although no settlement has been confirmed.

The disagreement has stalled coordination lengthy sufficient for lawmakers to start reviewing a number of competing drafts on the National Assembly’s Political Affairs Committee.

Delays in Stablecoin Rules Raise Fears South Korea Is Falling Behind

Industry teams have warned that continued delays threat leaving South Korea behind jurisdictions such because the United States, the European Union, and Japan, all of which have already established stablecoin guidelines.

Domestic stablecoin issuance stay unlawful in South Korea, whilst firms put together infrastructure behind the scenes.

Naver Financial has developed a blockchain wallet for Busan’s native forex program, whereas KakaoBank has begun work on a KRW-denominated digital token. Major banks have additionally explored a joint stablecoin challenge focusing on late 2025 or early 2026.

Regulatory urgency has been heightened by latest enforcement challenges. In December, Korean authorities disclosed that Binance froze solely a small portion of funds stolen throughout final month’s Upbit hack, regardless of pressing requests from police and the trade.

Investigators mentioned hackers quickly laundered belongings throughout chains and wallets, highlighting the problem of coordinating responses with out clearer oversight frameworks.

Experts mentioned the incident reveals the necessity for sooner, extra structured controls as digital-asset exercise expands.

South Korea’s stablecoin debate can also be unfolding in opposition to a backdrop of delayed crypto coverage extra broadly. The nation’s digital asset tax regime, accepted in 2020, has been postponed several times and is now scheduled for 2027.

The submit South Korea Misses Stablecoin Bill Deadline — Banks vs. Innovation Battle Heats Up appeared first on Cryptonews.

Similar Posts