- The new bill builds on the Digital Asset Framework Act by adding detailed rules for stablecoin regulation.
- The framework clarifies how global stablecoins such as USDT and USDC will be treated in South Korea.
- Officials warn that delays could leave South Korea behind other regions tightening rules in 2025.
South Korea is taking a significant step toward formally regulating the issuance and supervision of won-backed stablecoins, following resolution of a long-running debate over which authorities should oversee the process.
Closed-door discussions clarified key jurisdictional questions, with policymakers agreeing that banks should lead the initiative while still allowing technology companies to participate.
The move comes as adoption of cryptocurrencies rises among people aged 20 to 50 and global players continue to dominate the stablecoin market.
With a December deadline approaching, officials aim to finalize a framework that supports innovation while placing monetary stability at the center of regulation.
Alliance model defines roles for banks and tech firms
Maeil Business Newspaper reported on December 1 that lawmakers agreed on an alliance model in which banks retain majority control over entities that issue stablecoins.
Technology companies will still be able to participate, but financial institutions will take the lead to reduce systemic risk.
The goal is to build a Korean-style stablecoin framework that incorporates traditional financial safeguards and clearly defines reserves, issuance, and oversight.
The model is designed to address the Bank of Korea’s concerns about protecting the money supply.
It also provides private firms with a shared structure, lowering the risk of fragmented products entering the market without robust stabilizing mechanisms.
Policymakers hope that by setting shared standards early, they can shape a domestic stablecoin ecosystem that supports innovation without sacrificing financial safety.
Government faces December 10 proposal deadline
Senior Democratic Party lawmaker Kang Jun-hyun said the government must submit its proposal by December 10. If it misses that deadline, legislators will push their own version of the bill.
The target is to pass the law during a special session of the National Assembly in January, after consultations with the ruling People Power Party and the presidential office.
The new bill expands on the Digital Asset Framework Act passed earlier this year.
That earlier law set licensing rules for issuers, reserve protection requirements, and compliance obligations for virtual asset service providers.
The forthcoming legislation will fill remaining regulatory gaps and clarify how stablecoins should be governed when they operate like traditional financial instruments.
It will also provide clearer guidance for U.S. stablecoins such as USDT and USDC, whose influence in South Korea’s growing digital asset market has been rising.
Progress driven by global market developments
Officials cautioned that delays could leave Korean firms trailing global competitors.
The U.S., EU, and Japan are set to tighten stablecoin rules in 2025, creating clearer frameworks for exchanges and financial institutions.
Korean regulators want to avoid losing momentum, especially as domestic interest in cryptocurrencies continues to increase.
The updated framework aims to reduce uncertainty for developers, financial institutions, and exchanges.
By bringing digital assets closer to mainstream financial regulation, authorities hope to support responsible growth and give consumers access to well-regulated products.
The emphasis is on aligning the domestic market with international standards while preserving room for private-sector innovation.
Lawmakers discuss broader security and market reforms
Discussions also covered planned updates to financial security and capital market rules.
Following recent hacking incidents at major financial firms, officials plan to revise the Electronic Financial Transactions Act.
Proposed changes include tougher penalties and strengthened enforcement after cyber intrusions.
Lawmakers are also working with opposition parties on a series of capital market reforms.
These include provisions to require mandatory takeover offers in certain corporate situations.
They also plan to revise share allocation standards so retail investors can access products more fairly.
The broader aim is to enhance transparency and reinforce market integrity as South Korea reshapes its financial regulatory landscape.