The South Korean government and the National Assembly are currently promoting legislation (Digital Asset Basic Act (Phase 2 bill)) to officially include 'stablecoins' within the regulatory framework. The core content that has attracted the most attention from the outside is that the issuers of stablecoins will be limited to:
> Alliances (Consortium) where banks hold at least 51% equity
This means that in the future, the entities that can legally issue stablecoins within South Korea will be led by traditional financial institutions, while technology or blockchain industry companies may participate as minority shareholders or collaborators.
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Core policy: Banks become the main issuers of stablecoins
South Korean financial regulators and the National Assembly have been discussing this direction for some time, and relevant departments, including the central bank, generally believe that:
Stablecoins Pegged to Fiat Currencies
Involves Payments, Clearing, Capital Movement
Highly Related to Financial System Stability
Therefore, issuance rights should be entrusted to banks that are fully regulated, meet capital requirements, and have risk control capabilities.
In the past, some lawmakers argued that technology companies should be allowed to directly participate in stablecoin issuance, but after recent negotiations, the legislative direction has gradually converged to a 'bank-led, tech-assisted' framework.
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Regulatory Intent: Replace the Grey Area with Institutional Frameworks
From an overall policy positioning perspective, the purpose of the bill is not to block the crypto industry but to ensure financial security through institutional means, including:
Stablecoin Reserve Requirements
Regulatory Reporting
Clearing and Settlement Mechanism
Transparent Auditing
Reserve Asset Ratio
This move is seen as an important step for South Korea to incorporate virtual assets into the formal financial system, also indicating that the previously ambiguous position of the stablecoin market will begin to face a clearer legal framework.
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Behind Stablecoin Policies: Financial Security Over Issuance Freedom
The central bank has indicated that if issuance is led by non-bank enterprises, it may bring about:
Insufficient Reserve Assets
Clearing Risks
Lack of Transparency in Credit
Capital Outflow
In conflict with Monetary Policy
In the context of international geopolitical financial competition, ensuring that stablecoins are managed by a regulated banking system is seen as an important means to prevent the expansion of 'shadow currencies'.
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Impact Assessment: Not just policy, but also a signal
This institutional direction is also interpreted as:
> At the national level, crypto and on-chain currencies are beginning to be viewed from the perspective of 'financial infrastructure' rather than 'speculative assets'
From the attitude of the South Korean government, three trends can be observed:
1. National-level stablecoin frameworks are being formed
Through legal and regulatory mechanisms, stablecoins are moving toward institutionalization.
2. Traditional finance is aligning with digital assets
The role of banks is no longer just custody or payment, but also direct participation in token issuance.
3. Tech companies and on-chain finance becoming 'facilitators'
The crypto industry needs to run parallel with regulatory systems and accept stricter thresholds.
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Potential Challenges and Market Observations
While institutionalization helps enhance trust, there are also potential limitations:
Increased Entry Barriers for SMEs
Innovation and Competitiveness may Decline
Increasing Costs of Stablecoin Issuance
However, from the perspective of regulatory clarity and mainstream adoption, the establishment of systems can also accelerate the formal adoption of compliance funds, markets, and business institutions into crypto infrastructure.
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Cryptocurrencies are entering the stage of institutionalization
South Korea's legislative direction reflects that global regulation is moving toward the same context:
Legislation around US Dollar Stablecoins
EU MiCA Requirements for Transparency and Reserve System
Bank custody and tokenization policies in Hong Kong, Japan, and Singapore
As stablecoins are redefined as 'legal clearing tools' rather than 'speculative tokens', the boundaries between crypto and traditional finance will become increasingly blurred.
In future markets,
> Those who can meet the demands of stablecoins and tokenized assets may become the main body of the next round of financial infrastructure.
The pace of institutionalization has already begun, and the market evaluation methods are also quietly changing.
