South Korea Delays Digital Asset Bill Amid Regulatory Dispute Over Stablecoin Issuers

South Korea's progress on its next digital asset bill has been delayed as regulators remain divided on key policy issues, particularly regarding stablecoin issuers. Internal government talks continue, but the lack of consensus on stablecoin regulation has stalled the legislative timeline.

The draft bill proposes strict full-reserve requirements for stablecoins, mandating 100% backing in deposits or government bonds to protect users from issuer collapses. However, regulators are at odds over which entities should be permitted to issue stablecoins. The Bank of Korea advocates for a bank-led model, arguing that majority bank ownership WOULD ensure financial stability. In contrast, the Financial Services Commission opposes fixed ownership thresholds, warning they could stifle competition and innovation in the tech sector.

This regulatory impasse reflects broader tensions between financial stability concerns and the desire to foster growth in South Korea's rapidly expanding digital asset market. Market participants await clarity as lawmakers craft competing proposals to address these complex issues.