South Korea's Digital Asset Bill Faces Delays Amid Stablecoin Disputes

Source: DefiPlanet Original Title: South Korea’s Digital Asset Bill Faces Delays Amid Stablecoin Disputes Original Link: https://defi-planet.com/2025/12/south-koreas-digital-asset-bill-faces-delays-amid-stablecoin-disputes/

Quick Breakdown

• Basic Digital Asset Act to impose strict liability on digital asset operators and protect stablecoin issuers from bankruptcy.
• Stablecoin issuers may be required to hold 100% of issued coins in secure reserves to safeguard investors.
• Bill submission was delayed due to disagreements between the Bank of Korea and the FSC over stablecoin issuance rules.

South Korea’s forthcoming Basic Digital Asset Act, also referred to as Phase 2 of the Virtual Asset Bill, is expected to introduce robust investor protection measures, including strict liability for damages imposed on digital asset operators and protections for stablecoin issuers against bankruptcy risks. The government initially planned to submit the proposal this year, but unresolved issues with relevant organizations, particularly regarding stablecoin regulation, have pushed the timeline into next year.

Investor Protections and Regulatory Measures

The bill is set to require stablecoin issuers to maintain reserve assets in deposits, government bonds, or other secure instruments, while ensuring that at least 100% of issued stablecoins are managed by a bank or authorized institution. This move aims to shield investors from losses if issuers face insolvency. Additionally, the legislation is expected to standardize disclosure, terms and conditions, and advertising rules for digital asset operators, aligning them with financial industry standards. Operators may also face strict liability for damages arising from hacking incidents or system failures under the Electronic Financial Transactions Act. Domestic digital asset sales will be permitted, provided sufficient disclosure is provided and practices that circumvent domestic listing restrictions through overseas channels are addressed following the 2017 ICO ban.

Stablecoin Issuance Disagreements Delay Bill

Key disputes involve the issuance of stablecoins. The Bank of Korea advocates that only consortia holding a 51% majority stake should be authorized to issue stablecoins to ensure operational stability and regulatory compliance. In contrast, the Financial Services Commission opposes limiting technology firms’ participation, arguing that such measures could stifle innovation.

There is an ongoing debate over the need for a dedicated consensus body to oversee stablecoin approvals. The Bank of Korea supports creating a unanimous approval body, while the Financial Services Commission argues that the current administrative framework is sufficient.

Meanwhile, South Korea’s most prominent financial holding companies are accelerating their push into the stablecoin market. They are forming strategic partnerships with leading technology firms to establish a foothold in the rapidly expanding digital payments sector.