TLDR
- FSC and Bank of Korea remain split on which entities may issue stablecoins.
- Proposed law requires stablecoin reserves in bank deposits or government bonds.
- Issuers would need to entrust 100% of reserves to approved custodians.
- Delay pushes stablecoin legislation progress into next year.
South Korea’s stablecoin bill remains under review as key authorities remain divided on issuer eligibility. The proposed law, known as the Digital Asset Basic Act, is being prepared by the Financial Services Commission. However, unresolved differences with the Bank of Korea have slowed progress.
According to Yonhap News Agency, officials have not reached consensus on which entities should be allowed to issue stablecoins. This disagreement has pushed legislative discussions into next year, despite broader efforts to strengthen the country’s digital asset framework.
South Korea delays stablecoin regulation.
New rules for stablecoin issuers in South Korea may not come into force until next year.
Progress on the reform has stalled due to disagreements among authorities over which entities should be allowed to issue such assets.
Under the… pic.twitter.com/DoOBFfzXiz
— TU_Crypto_News (@TU_Crypto_News) December 30, 2025
The bill forms part of South Korea’s wider crypto regulation plan. Earlier rules focused on unfair trading practices and came into force in 2024. The stablecoin bill is intended to address structural risks and investor safeguards but remains incomplete.
Reserve rules and investor protection measures
Under the FSC proposal, stablecoin issuers would face strict reserve requirements. Issuers would need to hold reserve assets in bank deposits or government bonds. These assets would also need to be fully entrusted to approved custodians, such as banks.
The goal is to reduce risks linked to issuer insolvency. By separating reserve assets from issuer operations, authorities aim to limit losses if a stablecoin provider fails. Regulators view this structure as similar to safeguards used in traditional finance.
The proposal also includes disclosure and conduct rules for digital asset service providers. These would cover terms of service and advertising standards. Providers could also face liability for damages caused by hacks or system failures, even without fault.
Central bank and FSC clash over issuer control
The main deadlock involves issuer ownership requirements. The Bank of Korea argues that stablecoin issuance should be limited to bank-led entities. It has proposed a structure where banks hold at least a 51% stake in issuing consortia.
The FSC disagrees with setting fixed ownership thresholds. It argues that strict limits would restrict technology firms and slow innovation. The FSC has stated that stablecoin development requires both financial oversight and technical expertise.
The two bodies also differ on licensing oversight. The Bank of Korea supports creating a new committee to license stablecoin issuers. The FSC opposes this, stating that it already serves as a statutory body with cross-agency representation.
Political response and local stablecoin push
As talks stall, the ruling Democratic Party is preparing a separate digital asset proposal. Yonhap reported that the draft combines several lawmaker-led initiatives. The move aims to prevent further delays in crypto regulation.
Stablecoin interest has grown following the election of President Lee Jae Myung earlier this year. He has supported the creation of a Korean won stablecoin market. The goal is to reduce reliance on U.S. dollar-linked stablecoins.
ICOs may also return under the new framework. The FSC proposal allows token offerings for domestic projects that meet strict disclosure standards. ICOs have been banned in South Korea since 2017, following retail investor losses.
The Digital Asset Basic Act is expected to define the next phase of South Korea’s crypto rules. However, without agreement on issuer eligibility, stablecoin regulation remains uncertain.
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