South Korea’s ruling Democratic Party has given a firm deadline to the country’s financial authorities, urging them to expedite legislation for regulating the local stablecoin market. The party has requested that the Financial Services Commission (FSC) submit a proposal for stablecoin regulation by December 10, calling it a final demand.
Kang Jun-hyeon, a lawmaker from the ruling party, emphasized that if the government fails to meet this deadline, he will push forward a bill through the National Assembly’s Financial Services Committee.
Kang revealed that the ruling party aims to introduce the bill during the current session of the National Assembly, with plans to pass it by January. This push for legislation follows a meeting between members of the ruling party and the FSC on Monday.
Plans for a Bank-Led Consortium to Regulate Stablecoin Issuance
During the closed-door discussions, participants explored the possibility of forming a consortium involving the Bank of Korea, the FSC, and the banking sector to manage stablecoin issuance. One key point under consideration is the requirement that banks hold more than 50% of the consortium’s shares. However, no definitive agreements were made in the meeting.
President Lee Jae Myung has made developing a Korean won-based stablecoin market a priority, citing concerns over the dominance of U.S. dollar-backed stablecoins in global markets. This initiative is part of the president’s broader efforts to strengthen South Korea’s monetary sovereignty.
Despite various lawmakers proposing regulatory frameworks for the local stablecoin market, progress has been slow, and significant action has yet to be taken.
As the deadline approaches for the FSC’s stablecoin proposal, the discussions surrounding South Korea’s stablecoin market remain critical. If implemented, the legislation could provide the country with more control over its financial system, lessening reliance on foreign stablecoins while ensuring greater regulatory oversight over digital assets.
Japan Takes Action to Improve Crypto Investor Protections
Meanwhile, Japan is also advancing cryptocurrency regulations. According to Nikkei Asia, the Financial Services Agency (FSA) is preparing new rules to bolster protections for crypto investors.
The proposed regulations will require local crypto exchanges to maintain reserves against potential liabilities, aiming to ensure that customers are compensated in the event of security breaches or losses.
Currently, while Japan’s crypto exchanges must store user deposits in cold wallets for added security, there are no legal requirements to maintain reserves for potential losses due to hacks or other breaches.
This new legislation would address that gap by mandating exchanges to establish such reserves, offering an additional safeguard for investors in Japan’s growing cryptocurrency market.