South Korea’s Stablecoin Framework Stalls as Regulators Clash on Issuers
South Korea’s long-anticipated stablecoin regulatory framework has hit a wall later than key financial authorities clash over who should be permitted to issue won-pegged digital coins. Lawmakers and industry participants hoped the Digital Asset Basic Act would be finalized by late 2025 to offer clarity on stablecoin issuance, reserve requirements, and oversight. However, between the Financial Services Commission (FSC) and the Bank of Korea (BOK) have delayed the bill into ahead 2026, leaving the nation’s stablecoin ambitions in limbo.
The regulatory deadlock shows the deeper tensions between innovation and financial stability and highlights how internal disputes can sluggish a country’s progress in digital finance.
South Korea Lawmakers In Power Struggle Over Stablecoin Issuers
At the core of is a power struggle between the BOK and the FSC over stablecoin issuance authority and ownership requirements. The BOK advocates for a model in which bank-led consortia, with at least a 51% stake held by traditional banks, would be the primary issuers of stablecoins. Bank officials argue that such an arrangement would leverage existing regulatory infrastructure, reduce systemic risk, and ensure compliance with anti-money-laundering (AML) and know-your-customer (KYC) standards.
In contrast, the FSC has pushed for a more innovation-friendly framework that would allow non-bank entities, including fintech and blockchain companies, to issue stablecoins alongside banks. The commission points to foreign regulatory models, such as the European Union’s and Japan’s fintech-driven stablecoin initiatives, as evidence that broader participation can coexist with robust consumer protections.
As a result, the legislation, which was originally expected to bring legal clarity to stablecoin issuers and users, has been pushed into ahead 2026, frustrating lawmakers and market participants.
Innovation at Risk in the Hands of Industry and Investment Experts
In the short-term, the regulatory gridlock has consequences for South Korea’s fintech ecosystem. Blockchain projects and financial institutions planning to integrate stablecoins for payments, remittances, or decentralized finance (DeFi) face prolonged amlargeuity and legal uncertainty. For beginups and tech firms, this uncertainty can deter capital allocation, sluggish product development, and make it harder to plan long-term digital asset strategies.
At the identical time, critics argue that restricting stablecoin issuance to bank-led entities could stifle competition, limit the participation of agile fintech innovators, and consolidate market power in traditional financial institutions at the expense of dynamic blockchain beginups.
From an investor perspective, the stalemate introduces a risk premium into digital asset allocations tied to the Korean market. Without clear legal frameworks, institutional capital may remain cautious about participating in won-stablecoin liquidity, payment integrations, or .
However, this could also be an opportunity to refine the framework, incorporate international best practices and ensure that risk protections. Whether regulators can reconcile their differences will shape not only the future of stablecoin policy in South Korea but also the country’s competitive position in the global digital finance space.
