In South Korea, the ruling Democratic Party has made a final call to the government regarding the regulation process of the local stablecoin market. The party has set a deadline of December 10th for the Financial Services Commission (FSC) to submit a draft bill. If the deadline is missed, the regulation will be directly moved to parliament through legislative initiative by the party members. The aim is to introduce the proposal during the current legislative session and hold a vote by January 2026.
Banks’ Consortium Model on the Table
Party Secretary Kang Jun-hyeon has reinforced to the FSC that they will not allow further delays in this process. Should delays occur, he stated that the law would progress through a legislative proposal at the committee level. In a closed meeting held on Monday, party representatives convened with FSC officials to discuss a new issuance model for stablecoins. During the discussion, a potential model was deliberated, which involves the establishment of a consortium between the Central Bank, FSC, and the banking sector to issue stablecoins.
Kang highlighted in a statement that the draft proposes that at least 50% ownership of the consortium would remain with the banks. However, in a separate statement from the FSC, it was noted that no definitive consensus had been reached during the meeting. The commission announced that ongoing works continue to define the technical requirements and jurisdictional boundaries.
Goal of National Monetary Sovereignty
The stablecoin regulation was a prominent item in South Korean President Lee Jae Myung’s election campaign. Lee had strategically targeted the development of a won-based cryptocurrency market to strengthen the country’s monetary sovereignty and balance the market dominance of US-based stablecoins pegged 1:1 to the dollar.
However, noteworthy progress in the preparation of legislative proposals has not been achieved so far. The discussion on the bank-centered issuance model reflects the Central Bank’s persistent stance that stablecoin issuance authority should be limited to regulated banks. This new model aims to protect financial security while also opening a limited but controlled space for private sector innovation in cryptocurrency.