South Korea Report Proposes Phased Stablecoin Regulation
A policy report from Hashed Open Research and Solana Policy Institute recommends South Korea phase in stablecoin rules before its Digital Asset Basic Act. Lawmakers debated stablecoin issuance, with a compromise proposed allowing banks majority ownership while fintech firms manage operations, following the EU’s MiCA approach.
Quick Take
Report urges phasing stablecoin regulation before completing Digital Asset Basic Act.
Lawmaker proposes compromise: banks retain majority ownership, fintech manage operations.
Legal expert Kim Hyobong advocates for EU-style phased rollout and licensing clarity.
Symposium included lawmakers, experts discussing foreign stablecoin rules and licensing.
Market Impact Analysis
NeutralAlthough regulatory clarity is generally positive, this is an early-stage policy report with no immediate legislative action, limiting short-term market impact.
Speculation Analysis
Key Takeaways
- South Korea policy report recommends phasing in stablecoin regulations before the Digital Asset Basic Act passes.
- Lawmaker proposes compromise: banks retain majority ownership, fintech and non-banks handle operations.
- Legal expert Kim Hyobong calls for interim licensing and rules for foreign-issued stablecoins, following the EU's MiCA model.
- A June 23 symposium gathered lawmakers and industry to discuss stablecoin issuance and regulatory clarity.
What Happened
A policy report published Wednesday by Hashed Open Research and the Solana Policy Institute urges South Korea to phase in stablecoin regulation before passing its Digital Asset Basic Act. The report follows a June 23 symposium where lawmakers, legal experts, and industry figures debated stablecoin issuance rules. The Digital Asset Basic Act, intended as the country's first comprehensive crypto framework, remains stalled as legislators clash over who can issue stablecoins. The report proposes an interim solution: banks would maintain majority ownership while fintech and non-bank firms manage day-to-day operations. This compromise aims to break the legislative deadlock and provide immediate regulatory clarity for stablecoin issuers and users.
The Numbers
Hashed Open Research and the Solana Policy Institute released the policy report on Wednesday, summarizing the June 23 symposium. The Digital Asset Basic Act has been delayed indefinitely due to disagreements over stablecoin issuance, with multiple bills yet to be reconciled. The proposed compromise would give banks majority ownership, while fintech and non-bank firms handle operations. Legal expert Kim Hyobong pointed to the EU's MiCA phased rollout as a model, suggesting South Korea could introduce stablecoin-specific rules ahead of the broader act to resolve licensing uncertainty.
Why It Happened
The delay stems from conflicting views on stablecoin issuance. Lawmakers are divided over whether non-bank entities should issue stablecoins, with traditional financial institutions pushing for tighter control. The report highlights the need to clarify which crypto activities financial institutions can conduct and to establish rules for foreign-issued stablecoins. Without interim guidance, South Korea risks falling behind jurisdictions like the EU, which already implemented stablecoin-specific rules under MiCA. The symposium emphasized that a phased approach could offer immediate clarity and maintain momentum for broader crypto legislation.
Broader Impact
If adopted, South Korea's phased stablecoin regulation could set a precedent for other Asian markets. Clear rules on bank-fintech partnerships and foreign stablecoin usage would attract institutional players and align South Korea with global standards. However, the ongoing legislative process means no immediate changes; the impact depends on lawmakers' willingness to adopt the report's recommendations.
What to Watch Next
- Monitor whether lawmakers incorporate the phased approach into upcoming bills.
- Watch for further compromises on the ownership structure—the bank majority model may evolve.
- Keep an eye on the next regulatory symposium or parliamentary session for signals on timelines.
This article is for informational purposes only and does not constitute financial advice.
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