South Korea Delays Digital Asset Basic Act Amid Stablecoin Issuance Dispute

South Korea’s long-anticipated Digital Asset Basic Act (DABA), a comprehensive regulatory framework designed to govern cryptocurrency trading and token issuance, has been delayed due to sharp disagreements among policymakers over stablecoin regulation. The debate highlights growing global tensions around how fiat-backed stablecoins should be issued and regulated in major digital asset markets.

At the center of the delay is a conflict between the Bank of Korea (BOK) and the Financial Services Commission (FSC) over who should be allowed to issue won-pegged stablecoins. The BOK has proposed a strict rule requiring stablecoin issuers to be banks with at least 51% ownership, arguing that banks are already subject to rigorous capital, solvency, and anti-money-laundering standards. According to the central bank, limiting issuance to banks would help safeguard financial stability and reduce systemic risk.

The FSC, which oversees South Korea’s financial policy, has taken a more flexible stance. While acknowledging the importance of stability, the regulator warned that a mandatory 51% bank ownership rule could hinder innovation and reduce competition. It argued that fintech and blockchain-native companies often possess the technical expertise needed to build scalable and efficient stablecoin infrastructure, and excluding them could slow the country’s digital asset development.

To support its position, the FSC referenced the European Union’s Markets in Crypto-Assets (MiCA) regulation, where most licensed stablecoin issuers are digital asset firms rather than traditional banks. It also pointed to Japan’s yen-denominated stablecoin projects, which are largely driven by fintech companies under regulatory oversight.

The ruling Democratic Party of Korea has also pushed back against the BOK proposal. Lawmaker Ahn Do-geol noted that many experts question whether a bank-dominated model can foster innovation or strong network effects, adding that few global precedents exist for imposing a sector-specific 51% ownership requirement. He emphasized that stability concerns could be addressed through regulatory safeguards and technological controls.

Another unresolved issue involves foreign-issued stablecoins. Under an earlier FSC draft, overseas issuers like Circle’s USDC would be permitted only if they obtain local licenses and establish a South Korean branch or subsidiary.

Due to the regulatory deadlock, passage of the Digital Asset Basic Act is now expected to be delayed until at least January, with full implementation unlikely before 2026. The delay underscores South Korea’s cautious but evolving approach to crypto regulation after years of restrictive policies, and it reflects a broader global debate over the future of stablecoin governance.