South Korea’s Stablecoin Bill Is Stuck And Here’s Why That Matters
South Korea’s push to finalize a comprehensive stablecoin framework has stalled, with regulators locked in dispute over who should be allowed to issue the tokens.
The Financial Services Commission (FSC) and the Bank of Korea (BOK) remain divided on a key provision within the Digital Asset Basic Act, delaying progress until next year, according to reports from Yonhap.
South Korea's KRW stablecoin framework is experiencing major delay.
— Danny Kunwoong Park (@ParkKunwoong) December 30, 2025
Reason? Clash over who should be allowed to issue stablecoins.
The BOK insists issuance should center around local banks, while FSC supports the participation of tech companies. pic.twitter.com/LsDtyX8u4z
Strict Rules on Reserves and Investor Protection
The FSC’s draft proposal centers on protecting investors and limiting spillover risk if a stablecoin issuer fails.
Under the plan, issuers would be required to:
- hold reserve assets only in bank deposits or government bonds
- place 100% of reserves with approved custodians such as banks
- comply with strict disclosure and reporting rules
Digital asset service providers would also face advertising standards, terms-of-service obligations, and liability rules similar to those in traditional e-commerce. In the event of hacks or operational failures, platforms could still be held responsible.
The framework would also reopen the door to domestic initial coin offerings, banned since 2017, but only for projects meeting tough transparency and risk-management standards.
Core Disagreement: Who Controls Stablecoin Issuance?
The bill’s biggest sticking point remains the scope of entities allowed to issue stablecoins.
The Bank of Korea argues issuance should be confined to consortia where banks hold at least a 51% stake, citing financial stability and monetary control.
The FSC opposes that threshold, warning that rigid ownership rules could limit participation from technology firms and slow innovation. The two agencies are also split on whether a new licensing committee should be created to oversee issuers.
The BOK supports forming a dedicated body, while the FSC maintains its existing statutory authority already includes representation from both the central bank and the Ministry of Economy and Finance.
Political Pressure Builds
Amid the stalemate, the ruling Democratic Party is preparing its own consolidated proposal combining several lawmaker-led drafts.
President Lee Jae Myung has made the development of a won-denominated stablecoin market a priority, viewing it as a way to protect monetary sovereignty in a market dominated by U.S. dollar-backed tokens.
The Digital Asset Basic Act forms the second phase of South Korea’s broader crypto regulatory framework. The first phase, enacted in July 2023 and implemented last year, focused on mitigating market manipulation and insider trading.
For now, South Korea’s stablecoin rules remain on hold, and the outcome of the issuer debate will determine how open, or bank-controlled, the country’s digital asset market becomes.
