South Korea lawmakers push stablecoin law amid regulator clash

South Korean lawmakers are pressing the National Assembly to pass a regulatory framework for won-pegged stablecoins after a Korean won stablecoin reportedly began circulating overseas. The push focuses on the stalled second phase of the Digital Asset Framework Act.

Rep. Kim Sang-hoon, chairman of the Special Committee on Digital Assets for the ruling People Power Party, urged colleagues at a conference in Seoul to prioritize the bill. He warned that political debate over governance has lagged behind market developments and warned that overseas issuance of a won-linked stablecoin raises ‘serious concerns about our currency sovereignty.’

The core dispute is who should be allowed to issue a won-pegged stablecoin. The Bank of Korea has argued issuers should be consortia in which banks hold a majority stake, defined as 50% plus one share, to protect financial stability. The Financial Services Commission has pushed back against legally fixing a specific ownership percentage, saying the law should allow room for technology firms and fintech startups.

Lawmakers and industry representatives have expressed frustration at delays. Major meetings between the ruling party and the FSC were postponed, with officials citing external geopolitical tensions and the June 3 local elections as reasons for the slowdown.

Regulators are also discussing limits on major shareholders in crypto exchanges. One proposal would cap large stakes at roughly 15% to 20%, similar to rules in the Capital Markets Act. The proposal would apply to operators of major South Korean platforms, including Dunamu and Bithumb. Industry groups contend such caps would harm shareholder value and have raised constitutional objections.

At the conference, lawyer Han Seo-hee, an advisor to the Democratic Party’s Digital Asset Task Force, argued that strict ownership limits would violate property rights and equal protection. She noted that jurisdictions such as the European Union, the United States and Singapore do not impose comparable equity caps on exchanges.

Meanwhile, the Democratic Party’s digital asset task force is advancing rules for tokenized real-world assets. A draft integration plan reviewed by lawmakers would require issuers of RWA tokens to hold the underlying assets in managed trusts governed by the Capital Markets Act. Lee Jung-moon, who leads the Democratic Party’s Digital Asset Task Force, has called on the National Assembly to begin debate immediately, noting that multiple digital asset bills are already before lawmakers.

Seoul National University professor Lee Jong-seop emphasized technical safeguards over governance design, saying ‘The essence of the stablecoin crisis is not a problem of governance structure, but how to secure market trust through proper reserve holdings.’

The dispute among the Bank of Korea, the Financial Services Commission and lawmakers leaves no clear path for domestic issuance of won-pegged stablecoins while market actors may continue to develop products abroad. Lawmakers have called for prompt legislation to assert regulatory control and protect monetary sovereignty.