South Korea's much-anticipated stablecoin bill has been delayed, missing its December 10th deadline. The postponement stems from significant disagreements between the Financial Services Commission (FSC) and the Bank of Korea (BOK) regarding issuer control and approval powers, leaving the regulatory framework for digital assets in limbo.
Key Takeaways
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The FSC missed the deadline to submit the stablecoin bill to the National Assembly.
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A core dispute lies between the FSC and BOK over whether stablecoin issuers should be primarily bank-led.
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The BOK seeks significant control, including veto powers, while the FSC favors a more flexible, globally aligned approach.
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The delay impacts the "Basic Digital Asset Act (Phase 2)" which aims to establish licensing, capital, disclosure, and enforcement rules.
Regulatory Roadblocks Emerge
The Financial Services Commission (FSC) officially notified the National Assembly's Political Affairs Committee that it could not meet the December 10th deadline for submitting the government's proposed stablecoin bill. An FSC official cited the need for additional time to coordinate positions with relevant agencies, particularly the Bank of Korea (BOK).
The ruling party plans to introduce the "Basic Digital Asset Act (Phase 2 Virtual Asset Act)" by January 2026 at the latest. The FSC intends to release the proposal publicly alongside its submission to lawmakers, ensuring transparency and public awareness.
Clash Over Issuance and Control
The primary point of contention between the FSC and the BOK revolves around who should be permitted to issue stablecoins. The BOK advocates for a stringent model where stablecoin issuers must be majority bank-owned, holding at least 51% of the company's shares. This approach, according to the BOK, is crucial for maintaining currency stability and safeguarding the broader financial system.
Conversely, the FSC opposes this bank-led issuance requirement, pointing to limited global precedent. International frameworks like the EU's Markets in Crypto-Assets (MiCA) regulation show a majority of stablecoin issuers are digital currency firms, not traditional banks. Similarly, Japan's first yen-backed stablecoin was issued by a fintech company.
Further disagreements exist regarding approval powers. The BOK desires unanimous approval from all relevant authorities, including inspectors, and seeks veto power. The FSC, however, believes its own approval should suffice, viewing additional oversight as potentially excessive.
Broader Implications for Digital Assets
The proposed stablecoin bill is designed to be comprehensive, encompassing licensing requirements, operational standards, capital and solvency rules, listing and disclosure obligations, and enforcement measures for South Korea's digital asset market. The ongoing inter-agency disputes highlight institutional tensions over control of monetary policy in the evolving digital asset landscape.
While negotiations are reportedly ongoing, with potential compromises like partial bank stakes being discussed, the delay underscores the challenges in adapting traditional financial regulations to new digital technologies. Market participants await regulatory clarity as the FSC works to align differing agency viewpoints.
Sources
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Korea stablecoin bill delay exposes FSC–BOK clash over bank-led issuance, crypto.news.
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FSC Delays Won-Stablecoin Rules Amid Inter-Agency Disputes, Live Bitcoin News.
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