South Korea's Stablecoin Law Delayed Amid Regulatory Disputes

South Korea's digital asset law faces delays to 2026 amid disputes over stablecoin issuer eligibility and bank control, while new investor protection rules are set for 2025.

South Korea's efforts to regulate stablecoins and digital assets have faced significant delays, with the submission of the Digital Asset Basic Law now postponed until 2026 due to disagreements among key agencies, particularly over which entities should be allowed to issue stablecoins. The proposed legislation aims to introduce strict reserve requirements, investor protection measures, and liability rules for digital asset operators, with stablecoin issuers required to secure reserves in banks or government bonds. The main point of contention is whether banks should have majority control over stablecoin issuers, with some agencies arguing this could stifle innovation. The delay has created uncertainty in the market, though ongoing discussions among financial institutions continue. Meanwhile, a separate phase of the Digital Asset Basic Act is set to take effect in March 2025, introducing robust investor protections and transparency requirements, and is expected to serve as a regulatory model for other countries.