South Korea's stablecoin regulation table, delay in the enactment of the cryptocurrency law due to conflicts between banks and industry companies

The long-awaited Digital Asset Basic Act (DABA) in South Korea has been delayed until January due to conflicts among regulatory authorities over the issuance rights of Won-linked stablecoins, and it is increasingly unlikely that full implementation will occur before 2026. Disagreements on the regulatory table are prolonging policy uncertainty in one of Asia’s largest cryptocurrency markets.

Bank-led vs. Innovation-focused — Conflicts on the Regulatory Table

The Bank of Korea (BOK) and the Financial Services Commission (FSC) demonstrate fundamental differences regarding the authority to issue stablecoins. The BOK argues that only banks holding more than 51% of shares should be permitted to issue Won-linked stablecoins, emphasizing that only the banking sector can ensure financial system stability under strict solvency requirements and anti-money laundering regulations.

Meanwhile, the FSC, as the financial regulatory authority, warns that the 51% rule could significantly hinder competition and innovation. Through discussions on the regulatory table, the FSC highlights the value of leveraging fintech companies’ scalable blockchain infrastructure capabilities and technical expertise.

International precedents show diverse regulatory approaches

International case studies are crucial in shaping decisions at the regulatory table. In the European Union’s cryptocurrency market regulation, the majority of approved stablecoin issuers are not banks but digital asset companies. Additionally, Japan’s fintech-led yen stablecoin project is cited as an example of regulated innovation.

Opposition voices also raise objections — challenges in reaching consensus on the regulatory table

The ruling Democratic Party (DPK) also opposes the BOK’s 51% rule proposal at the regulatory table. DPK lawmaker Ahn Do-geol stated, “Most experts participating expressed concerns about the BOK’s proposal, questioning whether such a framework can foster innovation and strong network effects.”

Furthermore, the lawmaker pointed out that there are no global legislative precedents requiring 51% ownership in specific sectors, and argued that concerns over BOK’s stability can be mitigated through regulatory and technical measures. This view suggests that there is a “broad consensus among policy advisors” on the regulatory table.

Handling of foreign-issued stablecoins remains unresolved

Another key issue on the regulatory table is the treatment of foreign-issued stablecoins. According to the draft proposal by the FSC, overseas stablecoins would require licensing and the establishment of a branch or subsidiary within Korea. Foreign issuers, including Circle, which issues USDC—the second-largest stablecoin in the world—may need to establish a local presence.

Impact of delayed enforcement on the market

The delay in passing legislation due to regulatory deadlock has significant implications for South Korea’s market, which is seeking to shift away from nine years of de facto cryptocurrency bans. Until consensus is reached on the regulatory table, growth strategies for crypto trading platforms and issuers will remain uncertain.

With full enforcement expected to be delayed until 2026, the decisions made on the regulatory table will increasingly shape the competitive landscape, innovation promotion, and currency supervision in one of Asia’s largest cryptocurrency markets.