Delay in South Korea's Stablecoin Bill Highlights Conflict Between FSC and BOK

South Korea's Financial Services Commission (FSC) has missed the deadline for submitting its stablecoin bill to the National Assembly, amidst ongoing debates with the Bank of Korea (BOK) regarding the authority over who can issue these digital tokens.

Key Takeaways

The FSC failed to meet its deadline for the stablecoin bill due to disagreements with the BOK.
The proposed "Basic Digital Asset Act" is expected to be introduced by January 2026.
Key issues include who can issue stablecoins and approval requirements from regulatory authorities.
The proposed bill aims to create comprehensive regulations for digital assets, including licensing and oversight.

South Korea delays stablecoin bill amid FSC–BOK power clash.

The delay in the stablecoin bill submission stems from conflicts between the FSC and the BOK over bank-led issuance and regulatory powers, leaving many aspects of the regulatory approach in uncertainty. The FSC is working towards introducing a detailed stablecoin proposal by January 2026, aiming to establish clear rules for digital assets.

South Korea's Ongoing Crypto Trajectory

The National Assembly’s Political Affairs Committee had set a deadline for the FSC to submit its proposal by the 10th. However, an FSC official indicated that meeting this deadline would be difficult. “The FSC was unable to submit the government’s proposal within the requested timeframe,” the official confirmed. “They simply stated that they needed more time to coordinate their positions with relevant agencies.”

According to local reports, the ruling party in South Korea aims to present a stablecoin bill known as the “Basic Digital Asset Act (Phase 2 Virtual Asset Act)” by January 2026 at the latest. The FSC plans to submit this proposal to the National Assembly while simultaneously making it publicly available. This strategy aims to ensure transparency, allowing the public to be informed while legislators review the bill.

The FSC is currently in discussions with the Bank of Korea regarding the issuance of stablecoins, yet a primary disagreement exists over which entities should be authorized to issue these digital assets. The BOK has stated that stablecoin issuers should predominantly be managed by a bank consortium holding at least 51% of the shares of the issuing company. This requirement is framed as essential for maintaining currency stability and protecting the overall financial system, according to sources familiar with the situation.

In contrast, the FSC has expressed its resistance to the BOK's bank-focused issuance requirements, citing limited global examples where non-bank entities have successfully issued stablecoins. Notably, under the European Union’s Markets in Crypto-Assets (MiCA) framework, 14 of 15 stablecoin issuers are digital currency firms. Additionally, Japan’s first yen-backed stablecoin, JPYC, was issued by a fintech company.

The BOK is also advocating for unanimous approval from all relevant authorities, including inspectors. However, the FSC contends that its approval should be sufficient. Observers believe that a potential compromise could involve issuers maintaining a stake in accordance with their business model.

The forthcoming stablecoin bill is anticipated to implement thorough regulations governing digital assets, addressing key aspects such as licensing requirements, operational standards, capital and solvency rules, as well as listing, disclosure obligations, oversight, and enforcement measures, according to regulatory authorities.