- South Korea’s main political parties each introduced proposed laws to regulate stablecoins pegged to the Korean won.
- The two bills differ mainly on whether to ban interest payments on stablecoin holdings.
- Both proposals require issuers to fully back tokens with high-liquidity assets and give financial regulators emergency powers.
- The legislation comes as President Lee Jae-myung promotes a crypto-friendly agenda.
- Industry experts warn that too many restrictions could hurt Korea‘s competitiveness in digital finance.
On Monday, lawmakers from South Korea’s ruling and opposition parties filed separate bills targeting stablecoin regulation, setting the stage for a political debate on how digital assets tied to the Korean won should be governed.
Ahn Do-geol of the opposition Democratic Party introduced a proposal that would ban interest payments on stablecoins, while Kim Eun-hye of the ruling People Power Party submitted an alternative law that does not address interest restrictions. Both bills require full reserve backing for stablecoins and grant the country’s financial authorities authority to gather data and inspect issuers.
“Korea’s stablecoin regulation requires a balanced approach that combines essential government oversight with substantial private sector freedom,” said Rich O., Asia-Pacific manager at OneKey, in a statement to Decrypt. “While government control is necessary for monetary sovereignty, consumer protection, and systemic risk management, excessive restrictions could undermine Korea’s competitiveness in the global digital asset landscape.”
Under Ahn’s proposal, issuers would need at least $3.6 million in capital and approval from the Financial Services Commission. The bill requires stablecoin reserves to consist entirely of cash, demand deposits, or government and municipal bonds. In the event of bankruptcy, these reserves must be used to reimburse users within three business days, and the assets cannot be seized or used as collateral.
Kim’s bill emphasizes licensing and detailed disclosures. Stablecoin issuers would need to submit whitepapers and product information, aiming to “promote innovation in digital asset payments” and enhance market reliability.
Both bills come as regulators in countries like the U.S. and Europe focus on stablecoin oversight, driven by the rapid growth of crypto payments. Bank of Korea Governor Rhee Chang-yong has supported won-pegged stablecoins but noted the need to assess risks, especially regarding foreign exchange management.
The legislative debate also follows a campaign pledge by President Lee Jae-myung to advance South Korea’s leadership in digital finance. “Like the U.S. with its digital dollar, Korea must enter a new era of financial sovereignty with a won-based stablecoin,” Ahn said, according to Korea Joongang Daily.
Industry feedback encourages a regulatory framework focused on clear results while allowing for innovation in digital asset products. Both bills await further debate in the National Assembly.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Judge Bars Tornado Cash Founder’s Key Messages in Criminal Trial
- Bitcoin Hovers Near $120K as Traders Eye Key July Regulatory Moves
- ETH Futures Hold Steady as Institutional Demand Fuels $5K Target
- Inverse Finance Patches $2.6M Bad Debt, $3.4M Still Outstanding
- Bakkt Sells Loyalty Unit to Focus on Crypto Infrastructure Business
