South Korea could introduce dedicated stablecoin regulations before completing its broader cryptocurrency legislation, according to a new policy report, as regulators move to accelerate the country’s digital asset framework.
The recommendation comes as the Financial Services Commission (FSC) works to consolidate multiple cryptocurrency and stablecoin proposals into a single Digital Asset Basic Act, while industry participants continue debating how Korean won backed stablecoins should be regulated.
Key Takeaways
- A policy report recommends introducing interim stablecoin rules before South Korea completes its Digital Asset Basic Act.
- The Financial Services Commission plans to merge around 10 pending crypto and stablecoin bills into a unified framework.
- Lawmakers are considering a bank-led model for issuing Korean won-backed stablecoins.
- The proposed framework would establish rules for stablecoin issuance, exchanges, disclosures, and investor protection.
- Questions surrounding ownership requirements and foreign-issued stablecoins remain unresolved.
Report Recommends Phased Stablecoin Regulation
A policy report jointly published by Hashed Open Research and the Solana Policy Institute recommends that South Korea adopt a phased approach to stablecoin regulation rather than waiting for the completion of the Digital Asset Basic Act.
The report summarizes discussions held during a June 23 symposium involving lawmakers, legal experts, and industry representatives. According to the report, interim licensing guidance would provide greater regulatory certainty for companies developing stablecoin payment and settlement services while lawmakers continue negotiating the broader legislative framework. The recommendations are advisory and do not constitute current law.
Government Pushes Unified Crypto Framework
Separately, the Financial Services Commission confirmed it is preparing a government backed Digital Asset Basic Act that would combine approximately 10 pending cryptocurrency and stablecoin bills into a single legislative framework. Following consultations with the government and ruling party, the proposed legislation is expected to define digital asset businesses, establish conduct standards, and create a legal basis for stablecoin issuance and distribution.
The framework would also introduce clearer exchange licensing requirements, disclosure obligations covering token issuance and circulation, stronger internal controls, and enhanced information technology standards designed to bring crypto businesses closer to financial institution requirements.
FSC officials said the objective is to create a digital asset ecosystem that balances innovation with financial stability while strengthening anti money laundering measures.
Stablecoin Issuers Remain Key Point of Debate
One of the largest unresolved issues is determining who should be permitted to issue Korean won backed stablecoins.
Democratic Party lawmaker Ahn Do geol said policymakers are discussing a compromise that would allow banks to retain majority ownership while fintech companies manage day-to-day operations.
One proposal under consideration would require banks to own more than 50% of stablecoin issuing entities, while fintech firms could hold minority stakes with operational responsibilities.
Supporters argue the approach combines banking oversight with technological expertise, while critics believe strict bank control could limit competition and innovation.
The Bank of Korea has expressed support for a bank-led issuance model, citing concerns about monetary policy, financial stability, and capital flows.
Foreign Stablecoins and Exchange Ownership Still Under Review
The report also highlights unresolved questions surrounding foreign issued stablecoins.
Among the issues under discussion are whether overseas stablecoin issuers should establish local operations in South Korea, satisfy domestic reserve requirements, or obtain regulatory approval before offering tokens to Korean users. Meanwhile, regulators are considering whether ownership limits of 15% to 20% should apply uniformly to major domestic cryptocurrency exchanges, including Dunamu, Bithumb, Coinone, Korbit, and Gopax.
The Financial Services Commission has not yet released its official legislative draft, meaning these proposals remain subject to further consultation.
Broader Digital Asset Strategy Continues
The stablecoin initiative forms part of South Korea’s wider effort to modernize its financial system through blockchain technology.
The government has pledged to complete the second phase of its digital asset legislation during the second half of 2026 while also preparing a 2027 pilot that will connect tokenized government bonds with the Bank of Korea’s wholesale central bank digital currency (CBDC) platform.
At the same time, the FSC is reviewing guidelines that could expand corporate participation in the domestic cryptocurrency market, where financial institutions have faced significant restrictions since 2017.
Lawmakers have also agreed to increase the frequency of Political Affairs Committee meetings, a move expected to accelerate consideration of the government’s draft legislation once it is formally introduced.
Conclusion
South Korea is moving toward a comprehensive legal framework for digital assets, but policymakers may prioritize stablecoin regulation before completing the broader Digital Asset Basic Act. Both the government’s plans and the recommendations from industry experts reflect growing recognition that clearer rules are needed as stablecoin adoption expands.
Although significant policy questions remain including issuer ownership, exchange regulation, and oversight of foreign stablecoins the Financial Services Commission’s decision to consolidate multiple proposals into a single framework signals continued momentum toward establishing one of the country’s most comprehensive cryptocurrency regulatory regimes.
