South Korea Delays Digital Asset Bill, Stablecoin Rules Put Off

South Korea’s National Assembly removed the Digital Asset Basic Act from the agenda at the final bill‑review subcommittee meeting before the parliamentary recess on May 12, and lawmakers are unlikely to revisit the bill before local elections on June 3.

The bill has been stalled for months amid a dispute between the Financial Services Commission and the Bank of Korea over which agency should oversee stablecoins. The omission on May 12 extends that deadlock and delays legislative decisions on licensing and supervision.

The Digital Asset Basic Act is intended as a second phase of the country’s digital asset framework following the 2023 Virtual Asset User Protection Act. The draft would require licensing and disclosure rules for crypto firms, ban insider trading and market manipulation in virtual-asset markets, create a Digital Asset Committee to coordinate policy, set custody rules for customer assets and impose reserve and capital requirements on stablecoin issuers.

Under the proposal, stablecoin issuers would need at least 50 billion won ($35 million) in capital, a level aligned with rules for electronic-money businesses. Key provisions that remain unresolved include whether banks must hold majority stakes in stablecoin ventures and ownership limits for crypto exchanges and other virtual-asset businesses.

The delay increases uncertainty for firms planning won-backed stablecoins and for institutions building crypto services in South Korea. President Lee Jae-myung has promoted a won‑backed stablecoin as a priority to reduce reliance on dollar-linked coins. The ruling Democratic Party is working to merge several lawmaker proposals into a revised draft, and several domestic banks are exploring consortia to launch won‑pegged coins, with some targeting late 2026 for rollouts.

Projects tied to dollar‑pegged stablecoins, including ones linked to international tokens, and potential won‑backed offerings cannot finalize compliance structures while legislative rules are unsettled. Global exchanges and payment firms lack clear guidance on cross‑border operations and on whether overseas crypto licences will be recognised in South Korea.

South Korea’s market has about 9.7 million crypto investors, nearly 19% of the population, and daily trading volume on the five licensed domestic exchanges can exceed 11 trillion won ($7.9 billion) during active periods. Other jurisdictions, including the EU, Japan, Singapore and Hong Kong, have already put stablecoin or digital-asset licensing regimes in place.

With the National Assembly recessed for the local elections, the earliest realistic opportunity to resume debate on the Digital Asset Basic Act is likely in the second half of 2026.