South Korea is moving to introduce stablecoin regulations before finalizing its broader Digital Asset Basic Act. The Financial Services Commission is working to consolidate nearly 10 crypto-related bills into a single legislative package, aiming to clarify the framework around digital asset issuance, disclosure, and market operations.

The push for interim stablecoin rules comes amid ongoing debates on how to regulate these digital tokens. A recent report by Hashed Open Research and the Solana Policy Institute, summarizing discussions from a June 23 symposium with lawmakers and industry experts, advocates for granting issuers more operational flexibility during the lawmaking process. This would help reduce uncertainty for firms developing payment and settlement systems based on stablecoins.

Bank-Led Model Gains Traction

One key unresolved issue is the ownership and management structure of Korean won-backed stablecoins. Democratic Party lawmaker Ahn Dogeol suggested a hybrid model where banks retain majority ownership while fintechs and non-bank entities handle day-to-day operations. Legal expert Kim Hyobong emphasized the need for clearer rules on which crypto activities financial institutions are allowed to conduct, as well as regulations for payments using stablecoins and foreign-issued tokens.

The FSC’s unified bill is expected to include requirements for digital asset business licensing, internal controls, IT security, and market conduct standards. The regulator aims to have the framework ready by the end of 2026. South Korea is also planning a tokenized bond pilot in 2027, using the Bank of Korea’s wholesale CBDC, signaling broader interest in integrating digital assets into traditional finance.

These moves reflect a cautious but proactive approach to crypto regulation that balances innovation with investor protection. Still, stablecoin issuance rules remain a sticking point, and the final framework will significantly impact the country’s crypto landscape.

This article is for informational purposes and does not constitute financial advice.