Ripple warns of delays in South Korean stablecoin legislation… Digital financial leadership at a crossroads

As the global 'stablecoin' competition gains momentum, Ripple has warned of the possibility of losing industry leadership due to legislative delays in Korea. It is pointed out that the institutionalization of a Korean Won stablecoin will be a watershed moment for future digital financial competitiveness.

Rahul Advani, Co-Head of Global Policy at Ripple, stated in a pre-recorded video for a National Assembly seminar on the 12th, “The use of ‘stablecoins’ in global supply chains is rapidly expanding,” adding that “Korea must also urgently decide on a method of operation within the institutional framework.” These remarks were made during a policy discussion themed “Global Stablecoin Trends and Opportunities for Korea’s Digital Economy.”

The South Korean government is currently pushing forward with the 'Framework Act on Digital Assets (Phase 2),' aiming for implementation in 2026. The bill is reportedly intended to allow domestic ICOs for the first time in eight years, along with measures to lower the capital requirement for stablecoin issuance to 5 billion won or less. Related legislative discussions are also beginning in earnest within political circles.

Ripple Emphasizes Role as a 'Bridge' Connecting Regulation and Innovation

Advani emphasized that Ripple has played a "bridge role" between innovation and regulation. As an example, he cited the dollar-backed stablecoin RLUSD. He highlighted that RLUSD maintains a 1:1 value based on cash, U.S. Treasury bonds, and cash equivalents, and that it has received approval from the New York Department of Financial Services (NYDFS) and the Dubai Financial Services Authority (DFSA).

He explained, “Transparency of reserves and an independent external audit system are key,” adding that “such a structure can secure both consumer protection and stability.” This is also a core standard commonly raised in recent global discussions on stablecoin regulation.

KRW Stablecoin to Determine Global Supply Chain Competitiveness

Ripple strongly urged the institutionalization of Korean Won-backed stablecoins, in particular. The logic is that efficiency could be significantly improved if stablecoins are utilized in payment and settlement processes, given the crucial role Korean companies play in global supply chains.

Advani pointed out, “If legislation is delayed, industrial opportunities are highly likely to shift to other countries,” adding that “major economies are already accelerating the establishment of relevant regulations.” Currently, the establishment of stablecoin regulatory frameworks is progressing rapidly, centered on the U.S. and Europe, and the market size is projected to reach $1 to $2 trillion within a few years.

On the other hand, in Korea, changes to the domestic market structure are anticipated as the possibility of institutional restrictions on the use of foreign stablecoins such as Tether and Circle is raised. In this situation, concerns are also being raised that a gap in investor protection could occur in the absence of clear regulations.

Stablecoins, Not a Financial Replacement but a 'Modernization Tool'

Ripple explains that stablecoins play a role closer to complementing and modernizing the existing financial system rather than replacing it. In fact, Ripple's CEO has also defined stablecoins as a "means of improving financial infrastructure."

Ultimately, the key lies in the speed and direction of regulation. Analysis suggests that if a 'stablecoin' framework is established that balances consumer protection with innovation, it could serve as a foundation for Korea to leap forward as a digital financial hub. Conversely, if legislation is delayed, it is difficult to rule out the possibility of falling behind in global competition.

Source: ZDNet Korea