South Korea’s Digital Asset Basic Act Delayed Over Stablecoin Issuance Dispute
- The Digital Asset Basic Act (DABA) in South Korea has been postponed due to regulatory disagreements about who can issue KRW-pegged stablecoins.
- The Bank of Korea (BOK) proposes that only banks with at least a majority (51%) ownership should issue stablecoins, citing stability and regulatory compliance.
- In contrast, the Financial Services Commission (FSC) argues that a strict “51% rule” could hinder innovation and competition from fintech firms.
- Foreign-issued stablecoins may be allowed if they are licensed and have a local branch, impacting issuers like Circle, which issues USDC.
- The deadlock is expected to delay the bill’s passage until at least January, with full implementation now unlikely before 2026.
This regulatory impasse reflects ongoing global debates about the control of fiat-backed stablecoins, which could significantly influence competition and monetary oversight in digital finance.
The BOK’s proposal for a strict issuance rule is met with opposition from both the FSC and the ruling Democratic Party of Korea, indicating widespread concern about potential stifling of innovation in South Korea’s crypto market (Source).
