South Korea’s Financial Services Commission is preparing a consolidated Digital Asset Basic Act to resolve a legislative stalemate that has left 10 separate crypto and stablecoin bills pending in Parliament for months.
The FSC told the National Assembly it intends to introduce a government-backed bill covering won-denominated stablecoin issuance, digital asset business rules, exchange entry requirements, disclosures, internal controls, and system-resilience standards. The move comes as ruling Democratic Party lawmakers accelerate efforts to pass the second phase of DABA by year-end.
Bank Ownership Dispute Holds Up Legislation
The core dispute centers on whether won-denominated stablecoin issuers should be majority bank-owned. The Bank of Korea proposed that commercial banks hold at least 51% of any stablecoin issuance entity, a requirement that would effectively bar crypto-native firms and foreign issuers from the market.
However, participating experts have raised concerns about the BOK’s proposal. Lawmaker Ahn Do-geol of the Democratic Party questioned whether such a framework could deliver innovation or generate strong network effects, noting it was “hard to find global legislative precedents in which institutions from a specific sector are required to hold a 51%.”
Under the FSC’s competing draft, foreign issuers such as Circle would need a licensed local branch or subsidiary to operate legally in Korea. The FSC has not finalized when or how the consolidated bill will be introduced, leaving the timeline uncertain.
Industry Races to Position
The regulatory uncertainty has not stopped Korean financial institutions from preparing for a market they see as inevitable. KB Kookmin, the country’s largest bank, filed stablecoin trademarks ahead of a planned banking consortium. Shinhan, Woori, NH Nonghyup and other major banks are also positioning themselves.
On the non-bank side, Naver Financial is building a Web3 payment network on its fintech base, while KakaoBank, KakaoPay, and Viva Republica, operator of Toss, are realigning their digital asset strategies. The race reflects the sheer scale of the Korean market: the country hosts five major exchanges and a large retail crypto trading base.
Min Byung-deok, a Democratic Party lawmaker, called won-denominated stablecoins a national strategic priority. At a June 7 seminar in Seoul, he said stablecoins are already reshaping the financial order and that the question was no longer whether to adopt them, but how to use them and build competitiveness.
Crypto Tax Repeal Advances Separately
While stablecoin legislation remains stalled, a separate opposition effort to scrap South Korea’s crypto income tax has gained traction. The National Assembly’s Finance and Economic Planning Committee reviewed a bill introduced by People Power Party lawmaker Song Eon-seok that would abolish the planned 22% tax on crypto income before its January 1, 2027 implementation.
Under current law, income from transferring or lending crypto exceeding 2.5 million won, approximately $1,700, annually would face a 20% tax plus a 2% local income tax. The Finance Ministry confirmed in May that the tax would proceed after repeated delays, but the opposition bill could still derail it.
Global Stablecoin Competition Intensifies
South Korea’s regulatory push comes as global stablecoin competition accelerates. The United States enacted the GENIUS Act in July 2025, establishing federal stablecoin rules with 1:1 reserve requirements and monthly audited reports. The European Union’s MiCA framework has already forced major exchanges to delist non-compliant tokens like USDT, while Hong Kong launched its stablecoin licensing regime in August 2025.
Industry and academic speakers at Korean policy forums have warned that dollar-linked stablecoins are dominating the market while Seoul remains paralyzed by internal disputes. They said regulatory uncertainty around security token offerings and tokenized assets is keeping institutions on the sidelines, underscoring the need for early workable standards.
If the FSC succeeds in passing a consolidated bill by year-end, South Korea could join the growing list of jurisdictions with clear stablecoin rules. If not, the country risks falling behind in a market that is rapidly consolidating around regulated frameworks in the U.S., EU, and Asia-Pacific.
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