South Korea Misses Stablecoin Invoice Deadline — Banks vs. Innovation Battle Heats Up

South Korea’s effort to legalize won-pegged stablecoins has hit one other setback after the nation’s prime monetary regulator missed a government-imposed deadline, exposing a deepening energy battle between monetary authorities over who ought to management the subsequent section of digital finance.

Earlier this month, the ruling Democratic Celebration requested the Monetary Companies Fee to submit a draft stablecoin invoice by December 10, fulfilling President Lee’s marketing campaign pledge to create a authorized framework for digital property.

That deadline handed with no submission.

Stablecoin Disagreement Holds Up South Korea’s Crypto Invoice

The South Korean media outlet Newsis reported that FSC later confirmed it was unable to ship the proposal on time, saying it wanted further coordination with different companies.

A spokesperson mentioned the regulator would as a substitute launch the federal government’s place publicly alongside its formal submission to the Nationwide Meeting, citing the general public’s proper to grasp the framework being proposed.

The FSC mentioned it’s making ready a draft tentatively titled the Primary Digital Asset Act, additionally described as Section Two of South Korea’s digital asset laws.

Officers anticipate the proposal to be launched later this month or early subsequent month, forward of a consolidated invoice the ruling celebration has pledged to introduce in January 2026 beneath President Lee Jae-myung’s election commitments.

Behind the delay is an unresolved dispute between the FSC and the Financial institution of Korea over who ought to lead stablecoin issuance.

The central financial institution has argued that stablecoins operate equally to forex and deposit-like devices and will due to this fact stay beneath financial institution management.

It has pushed for a rule requiring home banks to carry at the least a 51% stake in any stablecoin-issuing entity, together with inspection powers and veto authority over approvals.

The FSC has resisted that method, pointing to abroad fashions, noting that almost all issuers beneath the European Union’s MiCA framework are non-bank digital asset corporations and that Japan’s first yen-linked stablecoin was issued by a fintech firm.

FSC officers have mentioned bank-led issuance lacks international precedent and will restrict participation by know-how corporations that already function digital cost infrastructure.

Negotiations between the FSC and the BOK stay ongoing. Officers conversant in the talks say a compromise might contain versatile possession thresholds primarily based on enterprise scope, although no settlement has been confirmed.

The disagreement has stalled coordination lengthy sufficient for lawmakers to start reviewing a number of competing drafts on the Nationwide Meeting’s Political Affairs Committee.

Delays in Stablecoin Guidelines Increase Fears South Korea Is Falling Behind

Trade teams have warned that continued delays threat leaving South Korea behind jurisdictions similar to the US, the European Union, and Japan, all of which have already established stablecoin guidelines.

Home stablecoin issuance stay unlawful in South Korea, whilst firms put together infrastructure behind the scenes.

Naver Monetary has developed a blockchain pockets for Busan’s native forex program, whereas KakaoBank has begun work on a KRW-denominated digital token. Main banks have additionally explored a joint stablecoin undertaking focusing on late 2025 or early 2026.

Regulatory urgency has been heightened by current enforcement challenges. In December, Korean authorities disclosed that Binance froze solely a small portion of funds stolen throughout final month’s Upbit hack, regardless of pressing requests from police and the trade.

Investigators mentioned hackers quickly laundered property throughout chains and wallets, highlighting the issue of coordinating responses with out clearer oversight frameworks.

Consultants mentioned the incident exhibits the necessity for quicker, extra structured controls as digital-asset exercise expands.

South Korea’s stablecoin debate can be unfolding towards a backdrop of delayed crypto coverage extra broadly. The nation’s digital asset tax regime, authorized in 2020, has been postponed a number of instances and is now scheduled for 2027.

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