The bill allowing the issuance of domestic stablecoins in South Korea has been delayed until 2026 due to disagreements over the regulatory body and the role of financial institutions in the sector .
South Korean lawmakers have decided to postpone the introduction of the Digital Asset Basic Law, a key bill that could pave the way for the issuance of stablecoins Peg to the Korean won. According to a Yonhap News report published on Tuesday, government officials now expect to introduce the bill sometime in 2026, rather than as originally planned.
The delay stems from major issues causing disagreements with relevant organizations, particularly stablecoin issuers. The bill, proposed by the ruling Democratic Party in June, was expected to significantly boost the cryptocurrency market in South Korea. Initially, stablecoin issuers would be required to entrust their entire reserve assets to licensed custodians such as banks, ensuring transparency and security for investors.
Controversy over the monitoring mechanism.
The main points of contention revolve around the question of whether it is necessary to grant oversight authority to a group of institutions overseeing stablecoin issuers before approval. The South Korean Financial Services Commission is currently scrutinizing this proposal, while also considering an alternative: limiting the Vai of financial institutions in the stablecoin sector to encourage participation from technology companies.
Addressing the issue of issuing domestic stablecoins was one of President Lee Jae-myung's key policy commitments to the people before his inauguration in June. He also supported the national pension fund investing in digital assets and expressed backing for the issuance of Bitcoin-linked Exchange Traded Fund , demonstrating his ambition to transform South Korea into one of the region's leading digital financial hubs.
Meanwhile, another story related to South Korea's cryptocurrency industry is also attracting attention. Do Kwon, co-founder of Terraform Labs, who was recently sentenced to 15 years in prison in the US for Vai role in the collapse of the company's ecosystem, may serve part of his sentence in South Korea as a citizen.
According to documents filed by Kwon's legal team, he could face up to 40 years in prison if convicted in South Korea, a significantly higher sentence than in the United States.
The delay of the stablecoin bill reflects the challenges South Korean policymakers face in trying to balance promoting innovation in the digital asset sector with ensuring the stability of the traditional financial system.
