South Korea’s Stablecoin Bill Deadline Pushed To 2026 Amid Regulatory Disputes
South Korea’s long-awaited crypto legislation faces further delays as regulatory agencies clash over stablecoin issuance policies. The Second Phase of the VIRTUAL Asset User Protection Act, now postponed to 2026, remains stalled due to unresolved disagreements between financial authorities.
The Financial Services Commission’s draft proposal includes stringent investor protections. Stablecoin issuers may be required to fully back reserves with deposits and government bonds, while crypto operators could face strict liability rules under the Electronic Financial Transactions Act. Reserve management mandates—including 100% custodial segregation—aim to mitigate bankruptcy risks.
Disclosure obligations and terms-of-service compliance are emerging as non-negotiable requirements for digital asset businesses. The legislative impasse reflects broader tensions in balancing innovation with consumer safeguards in Korea’s rapidly evolving crypto market.
