The ruling Democratic Party of South Korea has called for swift action on regulations concerning the local stablecoin market. They have established a firm deadline, pressing the Financial Services Commission (FSC) to deliver a draft bill by December 10th.
If the FSC does not meet this deadline, the Democratic Party intends to pursue the legislation through a parliamentary initiative, aiming to introduce it during the current session and secure a vote by January 2026.
During a recent private meeting, Democratic Party Secretary Kang Jun-hyeon emphasized the urgency of the situation, making it clear that further delays would lead to legislative proposals advancing at the committee level. The party and FSC representatives discussed an innovative issuance model that would involve collaboration among the Central Bank, FSC, and local banks to jointly issue stablecoins. Kang noted that the proposal would require banks to hold at least a 50% stake in such a consortium.
Despite these discussions, the FSC stated that no definitive decisions were made in the meeting. Work is ongoing to clarify the technical and jurisdictional aspects of the proposed regulations.
This regulatory push aligns with President Lee Jae Myung”s campaign focus on stablecoin regulation, which aims to create a won-based cryptocurrency market that enhances national monetary sovereignty. The strategy is designed to diminish the impact of U.S.-based stablecoins that are typically linked to the dollar.
While substantial legislative progress has yet to be achieved, the conversations surrounding a bank-inclusive issuance model reflect a continued commitment from the Central Bank. They assert that only regulated banks should have the capacity to issue stablecoins, a move intended to ensure financial stability while fostering a controlled environment for private cryptocurrency innovation.
Key highlights from this regulatory initiative include:
- A strict deadline of December 10th for the FSC to draft a regulatory framework for stablecoins.
- The Democratic Party”s willingness to push forward with legislative processes should any delays occur.
- The proposed consortium model, which emphasizes at least 50% bank ownership, ensuring regulated participation in stablecoin issuance.
- Ongoing efforts to define the technicalities and jurisdictional parameters of the proposed regulations.
The agenda for stablecoin regulation is a critical component of the current administration”s financial and technological strategy. As developments unfold, market observers are closely monitoring whether these regulatory actions will strengthen South Korea”s financial independence from foreign crypto influences.
