South Korean lawmakers have set a December 10 deadline for financial regulators to submit a stablecoin regulation draft, threatening independent legislation if unmet. This move aims to resolve ongoing disputes over bank involvement in stablecoin issuance while ensuring financial stability and innovation in the crypto sector.
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South Korea’s ruling party demands a stablecoin regulatory framework by Dec. 10 to advance crypto policies.
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Disagreements persist on whether banks should lead stablecoin consortia with majority ownership.
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The Bank of Korea favors at least 51% bank equity in issuers for enhanced oversight and AML compliance, per recent consultations.
South Korea stablecoin regulation heats up with a Dec. 10 draft deadline from lawmakers, amid bank role debates. Stay ahead of crypto policy shifts—explore implications for KRW-pegged assets today.
What is the deadline for South Korea’s stablecoin regulation draft?
South Korea stablecoin regulation has reached a critical juncture, with lawmakers imposing a December 10 deadline for financial regulators to deliver a draft bill. This framework seeks to govern the issuance of Korean won-pegged stablecoins, addressing stability and innovation concerns. If unmet, the National Assembly plans to legislate independently, potentially fast-tracking discussions to an extraordinary session in January 2026.
Why is there disagreement on bank involvement in South Korea stablecoin regulation?
The core dispute in South Korea stablecoin regulation revolves around the extent of banks’ roles in stablecoin issuance. The Bank of Korea advocates for banks to hold at least 51% equity in any issuing consortium, citing their established regulatory oversight and robust anti-money laundering (AML) protocols. This approach, according to a Bank of Korea official, leverages banks’ experience to mitigate risks associated with digital assets.
However, the Financial Services Commission (FSC) pushes for a more inclusive model, emphasizing the need for a diverse ecosystem that fosters industrial innovation. During a recent ruling party-government consultation, both sides acknowledged the tension but committed to expediting the bill. Sangmin Seo, chair of the Kaia DLT Foundation, critiqued the central bank’s stance, stating that it lacks a logical foundation and that clearer guidelines on risk mitigation and issuer qualifications would better serve the sector. An official from lawmaker Kang Joon-hyun’s office noted that the ruling party is seeking a balanced solution that upholds monetary policy stability while supporting FSC-highlighted innovations.
These discussions follow earlier reports from Maeil Business Newspaper indicating stalled progress due to these disagreements. Without resolution, South Korea risks entering 2026 without a comprehensive framework for locally issued stablecoins, potentially hindering the growth of its crypto market.
South Korea’s Financial Services Commission headquarters in Seoul. Source: Wikimedia
Frequently Asked Questions
What happens if South Korea’s stablecoin regulation draft misses the December 10 deadline?
If the draft for South Korea stablecoin regulation is not submitted by December 10, lawmakers from the Democratic Party, led by Kang Joon-hyun, plan to pursue independent legislation through the political affairs committee. This could accelerate the process, with potential review in the National Assembly’s January 2026 session, ensuring timely oversight of won-pegged stablecoins.
How does the Bank of Korea view bank ownership in stablecoin issuers?
The Bank of Korea supports majority bank ownership, ideally at least 51% equity in stablecoin consortia, to ensure regulatory compliance and effective AML measures. This position stems from banks’ proven track record in financial stability, allowing for safer integration of stablecoins into the broader economy while minimizing systemic risks.
Key Takeaways
- Urgent Deadline: Lawmakers’ Dec. 10 cutoff pressures regulators to finalize the stablecoin bill amid ongoing consultations.
- Bank Role Debate: Central bank pushes for 51% bank equity in issuers for oversight, contrasting FSC’s innovation-focused approach.
- Path Forward: Balanced regulation could stabilize KRW-pegged stablecoins; monitor for January 2026 Assembly discussions to gauge market impacts.
Conclusion
The push for South Korea stablecoin regulation underscores the nation’s commitment to balancing financial stability with crypto innovation, particularly regarding bank involvement in issuance models. As regulators and lawmakers collaborate toward the December 10 draft, the outcome will shape the future of won-denominated stablecoins. Investors and stakeholders should prepare for potential policy shifts by staying informed on these developments, positioning themselves for opportunities in South Korea’s evolving digital asset landscape.
