Lawmakers Demand Action as Stablecoin Bill Faces Countdown
South Korea is keen to pass a stablecoin regulatory framework. Lawmakers in the region have set a deadline of 10 December for financial regulators to come up with a draft. This move underscores the rift between South Korea’s central bank, the Bank of Korea (BOK), including regulators such as the Financial Services Commission (FSC), and the ruling party over banks’ participation in stablecoin issuance.
Democratic Party lawmaker Kang Joon-hyun warned:
“If the government bill is not given by this deadline, we will strategise to move a Bill through secretary of political affairs committee.”
If the bill gets submitted in time, it will be discussed during an extraordinary session of the National Assembly of South Korea that will take place in January 2026.
Regulators Remain Divided — No Decision Yet on Bank-Backed Stablecoins
The FSC confirmed that the government ruling party discussed the regulation of stablecoins during Monday’s consultation. However, the consultation was not about deciding a consortium in which banks would have 51% or more ownership of a KRW-pegged stablecoin issuer.
The disagreement is primarily due to differences in vision that has emerged between the BOK, which supports majority bank ownership as it would allow the regulator to retain authority with prior regulatory and Anti-Money Laundering (AML) experience, and the FSC/industry advocates, who favor a more utility model approach, better suited for a diversified ecosystem.
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Why the Bank-Led Model is Controversial
The BOK claims that banks are best placed to control stablecoins because they are already compliant with tight regulations on finances and have extensive AML experience. A central bank official noted:
“Since banks are already regulated and they handle Anti-Money Laundering protocols well, issuing stablecoin is ideal for banks.”
Yet, in October, Sangmin Seo — head of the Kaia DLT Foundation — critiqued this move. In Seo’s opinion, it has “no logical basis.” Instead, he advocates for regulatory terms for issuers to follow, not compulsory majority bank ownership.
According to Yonsei University professor Kim Jin-seok regulation to provide clarity on risk mitigation and trustworthy issuers will be more important than banning them.
On Monday, Kang’s office revealed that the ruling party is looking for a balanced solution which takes into account monetary policy stability and the innovation priorities flagged by the FSC.
What’s Next for South Korea’s Stablecoin Regulation
With December 10 nearing, everyone is watching the financial regulators in South Korea. The ecosystem of stablecoins in the country is currently in limbo owing to pressure on lawmakers to create a framework that balances traditional banking as well as crypto oversight.
The result will probably influence issues and governance of KRW-pegged stablecoins and will impact South Korea’s standing as an Asian digital finance hub.
