South Korea stablecoin bill stalls in dispute

TLDR

South Koreas Digital Asset Basic Act is stalled because regulators cannot agree on who should issue won-pegged stablecoins.

1. Bank of Korea insists banks control issuance to prevent FX leakage, while the Financial Services Commission and industry lobby for broader authorization, keeping the bill frozen.bank-led issuance
2. Lawmakers did settle on a ?5 billion ($3.5 million) capital floor for issuers and a crisis-response council, yet ownership-cap debates show core safeguards remain incomplete.capital requirement
3. Submission is now aimed before the 17 Feb Lunar New Year, but unresolved governance and currency-risk concerns could push deliberations into the first half of 2026.Lunar New Year timeline

Deep Dive

1. Issuer Control Standoff

Governor Lee Chang-yong warned that won stablecoins could pair with dollar tokens to bypass capital controls, so the Bank of Korea wants issuance confined to bank-led consortia with at least majority lender ownership.capital-control warning Regulators at the Financial Services Commission counter that locking out fintech firms would freeze innovation and delay domestic payment upgrades, leaving the ruling party split and unable to submit the bill. The deadlock has also paused related priorities such as letting listed companies hold crypto or launching spot ETFs, extending uncertainty for exchanges and enterprise pilots.

2. Agreed Safeguards So Far

Despite the stalemate, the Democratic Partys task force endorsed a ?5 billion paid-in capital requirement for issuers, aligning stablecoins with electronic money rules, and backed a Virtual Asset Committee led by the FSC to coordinate responses to hacks or outages.capital requirement The FSC simultaneously proposes capping any exchanges major shareholder at roughly 15% to 20% to prevent concentrated control, a move that would force divestments at operators like Upbit and Coinone.shareholder caps These measures show where consensus existscapital buffers, crisis playbooksbut the lack of clarity on ownership limits keeps business planning difficult.

3. Timeline And Watchpoints

Task force leaders say they need one to two weeks to coordinate with the partys policy committee and government ministries, targeting a formal submission before the 17 Feb Lunar New Year, yet acknowledge that Bank of Korea authority and shareholder caps remain unresolved.Lunar New Year timeline If no compromise emerges, the next legislative window may slip into the April parliamentary session, delaying bank-led stablecoin pilots (like those already scoped by Solana Foundation partners) and prolonging uncertainty for KRW liquidity management. Investors should track whether policymakers give banks veto rights or accept sandboxed non-bank issuers, because that decision will determine how quickly KRW stablecoins can rival dollar tokens in regional trade.

Conclusion

The stalled bill reflects a classic policy trade-off: Seoul wants to attract digital asset business without opening channels for rapid won outflows. Capital buffers, crisis committees, and potential exchange ownership caps show the shape of future rules, but until the Bank of Korea and the FSC settle issuer control, KRW stablecoin launches and corporate crypto participation will remain in limbo. Resolving that single governance question unlocks the rest of the framework; sustained disagreement risks pushing Koreas market leadership ambitions further into 2026.