South Korean lawmakers are temporarily postponing the presentation of a key cryptocurrency bill to the National Assembly, which would allow the issuance of a domestic stablecoin Peg to the won, due to remaining core issues that have yet to be agreed upon by all stakeholders. This move highlights the significant obstacles facing South Korea in establishing a comprehensive legal framework for digital assets, despite the country being XEM one of Asia's most dynamic crypto markets.
According to domestic media reports, the South Korean government is still finalizing the Basic Law on Digital Assets, but its submission may be delayed until 2026. The main reason for the delay stems from significant disagreements with relevant organizations, particularly those expected to issue stablecoins. These debates revolve around the regulatory structure, oversight mechanisms, and the Vai of traditional financial institutions in the stablecoin ecosystem.
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The aforementioned bill, proposed by the ruling Democratic Party in June, aims to pave the way for the issuance of stablecoins pegged to the won, thereby boosting the domestic cryptocurrency market and reducing reliance on USD- Peg stablecoins. According to the draft, stablecoin issuers would be required to deposit all their reserve assets with licensed custodians, such as banks, to ensure transparency and security for users. This is XEM a crucial point to avoid a repeat of past systemic shocks.
However, one of the most contentious issues is whether to establish or designate a sufficiently authoritative body to oversee stablecoin issuers even before licensing. The South Korean Financial Services Commission is currently carefully XEM this proposal, while also contemplating the possibility of limiting the Vai of traditional financial institutions in the stablecoin market to encourage stronger participation from technology and fintech companies. This approach reflects an effort to find a balance between risk management and innovation.
