South Korea report proposes stablecoin rules before crypto law

Summary

A policy report published by Hashed Open Research and the Solana Policy Institute on June 28 recommends that South Korea implement interim licensing guidance and allow greater flexibility for stablecoin issuers before finalizing its Digital Asset Basic Act. The report, which summarizes discussions from a June 23 symposium involving lawmakers, legal experts, and industry participants, suggests a phased approach to stablecoin regulation. This would involve introducing stablecoin issuance rules prior to the full enactment of the Digital Asset Basic Act, which aims to provide South Korea’s first comprehensive framework covering stablecoins, their issuance, disclosures, and market conduct.

The Digital Asset Basic Act is still in development, as lawmakers work to consolidate multiple bills and bridge disagreements, particularly regarding stablecoin issuance. Democratic Party lawmaker Ahn Dogeol indicated that policymakers are seeking a compromise where banks would maintain majority ownership of stablecoin issuers, while fintech and non-bank companies would manage operations. Meanwhile, Kim Hyobong, a partner at the law firm Bae, Kim & Lee, emphasized the necessity for South Korea to better define the activities financial institutions can conduct in the crypto space, resolve licensing ambiguities related to stablecoin payments, and clarify regulations concerning foreign-issued stablecoins.

Why it matters

Kim also recommended that South Korea look to the European Union's Markets in Crypto-Assets Regulation (MiCA) as a model for regulating stablecoins in phases, rather than waiting until the entire Digital Asset Basic Act is in place. This staged regulatory approach would provide clearer interim guidance and legal certainty for industry participants. The source indicates that such regulation is important to set standards for stablecoin issuance and to address ongoing uncertainties in South Korea’s crypto regulatory environment.