South Korea should introduce interim stablecoin licensing guidance before lawmakers complete the wider Digital Asset Basic Act.
Summary
- South Korea’s report urges stablecoin licensing guidance before lawmakers complete the Digital Asset Basic Act.
- Bank majority ownership could coexist with fintech management under a compromise discussed by lawmakers publicly.
- Ten pending proposals may be combined into one government-backed digital asset bill during 2026 negotiations.
According to a policy report published July 29 by Hashed Open Research and the Solana Policy Institute.
The report summarises a June 23 symposium attended by lawmakers, lawyers and digital-asset industry representatives. It recommends a phased approach addressing stablecoin issuance, payments and foreign tokens while lawmakers continue negotiating a comprehensive market framework. The recommendations are advisory and do not change current law.
South Korea stablecoin rules could arrive in stages
The report argues that waiting for the full Digital Asset Basic Act could leave businesses without clear rules for issuing or using won-backed stablecoins. It recommends interim guidance on licensing, permitted activities and payment services so regulated firms can prepare before the final law takes effect.
Bae, Kim & Lee partner Kim Hyo-bong also urged South Korea to consider the European Union’s rollout of the Markets in Crypto-Assets Regulation. MiCA’s stablecoin provisions began applying on June 30, 2024, six months before the framework became fully applicable. The comparison supports introducing stablecoin rules before completing every part of the broader crypto framework.
Bank control remains the central dispute
Democratic Party lawmaker Ahn Do-geol said policymakers were considering a “compromise” under which banks would retain majority ownership of stablecoin issuers while fintech or other non-bank partners managed operations. The model has not been adopted and remains part of negotiations.
As previously discussed a structure in which banks would own more than 50% of an issuer and a fintech company could hold 34% with management rights. Supporters say the model could combine bank oversight with technical expertise. However, critics of strict bank control argue it could narrow competition.
The Bank of Korea has supported a bank-led approach because of monetary, foreign-exchange and financial-stability concerns. Central bank officials have warned that easier conversion between won and U.S. dollar stablecoins could complicate capital-flow management.
Ten proposals may be folded into one bill
The Financial Services Commission told the National Assembly ahead of a July 29 policy briefing that it plans to prepare a consolidated Digital Asset Basic Act with the ruling Democratic Party. Ten digital-asset and stablecoin proposals are already pending, but the regulator has not announced a filing date or final wording.
The proposed framework is expected to cover stablecoin issuance and circulation, exchange conduct, disclosures, internal controls and system resilience. South Korea’s existing Virtual Asset User Protection Act mainly governs custody, unfair trading and customer safeguards, leaving issuer and market-structure rules for the second stage.
The policy report also asks lawmakers to look beyond issuer eligibility. Its wider recommendations cover payment networks, public blockchains, tokenised assets and links between traditional markets and decentralised finance. These proposals reflect symposium participants’ views rather than agreed government policy.
Foreign stablecoins and financial institutions need clarity
Kim said policymakers should define which digital-asset activities banks and other financial institutions may conduct. The report also calls for clear licensing treatment for stablecoin payments and rules covering foreign-issued tokens offered to Korean users.
Expected policy questions include whether overseas issuers must establish a local branch, meet reserve and custody standards, or obtain domestic approval. These details remain unsettled, so the report’s recommendations should not be read as current legal requirements.
As previously reported, South Korea has outlined a wider roadmap for won-backed stablecoins alongside foreign-exchange reforms, central bank digital-currency pilots and tokenised government bonds.
In addition, the FSC said it wants to combine ten pending proposals into a government-backed bill during 2026. Lawmakers must still reconcile bank ownership, non-bank participation, reserve safeguards and the treatment of overseas stablecoins.
No parliamentary vote or implementation deadline has been announced. Moreover, no verified crypto-market movement has been directly linked to the policy report’s publication.
