- Submission of the Digital Asset Basic Act has been pushed to 2026 amid unresolved issues with stablecoin issuers.
- The proposed bill would allow stablecoins pegged to the won and require issuers to place reserves with authorized custodians, such as banks.
- Regulators disagree on pre-approval oversight and the role of financial institutions versus technology firms.
- Separately, Do Kwon, co-founder of Terraform Labs, faces U.S. and potential South Korean prison terms after a U.S. sentence.
South Korean officials delayed submitting the Digital Asset Basic Act until 2026 as disagreements persist over stablecoin rules and oversight. Lawmakers expect the delay because of what they described as “major issues that raise disagreements with relevant organizations, including stablecoin issuers.” Officials were reportedly continuing to work on the bill.
The bill, proposed by the ruling Democratic Party in June, would permit issuance of stablecoins pegged to the won and aims to support the domestic crypto market. A stablecoin is a cryptocurrency designed to maintain a stable value by linking to a fiat currency or asset. Under the proposal, issuers must entrust all reserve assets to authorized custodians, such as banks.
Lawmakers and industry groups disagree on whether to require pre-approval oversight by a designated group of organizations before issuers can operate. The Financial Services Commission is reviewing the proposal and is weighing limits on financial institutions’ roles to promote entry by technology companies.
Addressing local stablecoin issuance was a campaign promise of President Lee Jae-myung before he took office in June. He also supported allowing the national pension fund to invest in digital assets and backing exchange-traded funds tied to Bitcoin (BTC).
A separate development involves Do Kwon. He was sentenced to 15 years in prison in the United States for his role in the collapse of his firm’s ecosystem. A filing from Kwon’s legal team states he could serve part of that sentence in South Korea, where he is a citizen, and could face up to 40 years in prison under local law. A related video was embedded with the original report.
Authorized custodians: institutions legally permitted to hold and safeguard reserve assets for issuers.
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