South Korea's Stablecoin Deadline Triggers Regulatory Dispute Between Banks and Fintech Firms
- South Korea's ruling party demands a stablecoin regulatory draft by Dec 10, threatening independent legislation if unmet. - Proposed framework requires banks to hold 51% in issuing entities, balancing fintech innovation with monetary stability concerns. - Bank of Korea (BOK) opposes non-bank issuers, while Financial Services Commission (FSC) advocates lower fintech barriers. - Global 2025 stablecoin regulations push South Korea to accelerate, with AML rules expanding to all crypto transactions. - Deadlin
South Korea Sets Deadline for Stablecoin Regulation
South Korea’s ruling party has issued a clear ultimatum to the government, demanding that a draft regulatory framework for stablecoins be submitted by December 10. Lawmakers have warned that if regulators miss this deadline, they will proceed with their own legislative proposal. This urgency highlights the country’s drive to establish a bank-led consortium model for issuing stablecoins pegged to the Korean won, aiming to balance financial stability with technological progress.
The proposed regulations, which are part of the broader Digital Asset Basic Act, seek to launch a uniquely Korean stablecoin system by January 2026. Under this plan, banks must hold a majority stake—at least 51%—in any stablecoin-issuing entity, a measure designed to reduce systemic risks. This approach addresses long-standing concerns from the Bank of Korea, which has cautioned that allowing non-bank issuers could threaten the financial system by mimicking deposit functions without adequate safeguards.
As global standards evolve, South Korea is racing to keep pace with regions like the United States, the European Union, and Japan, all of which have already implemented stablecoin regulations. The proposed consortium model would allow technology companies to participate as minority shareholders, encouraging innovation while maintaining strong financial oversight. However, there is ongoing debate between the Financial Services Commission, which supports easier access for fintech firms, and the Bank of Korea, which insists on strict bank control.
The December 10 deadline was set during a confidential meeting between lawmakers and financial authorities. Kang Joon-hyun, a prominent member of the Democratic Party, emphasized that if the government fails to deliver the draft, legislators will introduce their own bill. This move reflects the high political stakes, as the ruling party aims to pass the new rules during a special National Assembly session in January 2026.
While the Financial Services Commission has confirmed that discussions are ongoing, it has not yet finalized the details of the consortium structure. The regulatory overhaul extends beyond stablecoins, with plans to strengthen anti-money laundering (AML) requirements for all cryptocurrency transactions, including those below 1 million won (approximately $680). The Financial Intelligence Unit is also preparing updated AML guidelines for stablecoin issuers to align with international best practices. These reforms will require virtual asset service providers to meet higher standards for reserves, compliance, and operational security.
Market trends are adding to the urgency. While global stablecoin activity is dominated by U.S. dollar-backed tokens such as USDT and USDC, South Korean companies like Naver Financial and KakaoBank are developing their own domestic stablecoin projects, reflecting strong corporate interest in localized digital currencies. Regulators hope the new framework will encourage competition and innovation without undermining monetary control.
As the deadline nears, the government faces increasing pressure to resolve ongoing disagreements. Striking the right balance is crucial: too much bank control could hinder technological advancement, while insufficient oversight could jeopardize financial stability. The decisions made in the coming months will determine whether South Korea becomes a leader in digital asset regulation or risks falling behind other early adopters.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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