Political breakthrough on stablecoin framework
South Korean lawmakers have finally reached an agreement on the most contentious part of their digital asset legislation—the stablecoin framework. This had been holding up negotiations for months, but now both ruling and opposition parties have settled on a consortium model.
From what I understand, banks will hold majority stakes in these stablecoin projects, but they’ll allow technology companies to participate too. It’s a compromise structure that tries to balance different interests. The Bank of Korea gets what it wants regarding monetary stability, while private sector firms get some room to innovate.
Officials are calling this a “Korean-style stablecoin” approach. They’re emphasizing clear safeguards around reserves and issuance, which makes sense given the concerns about financial stability.
Deadline pressure and legislative timeline
There’s a tight deadline here. Lawmaker Kang Joon-hyun says the government needs to submit its official proposal by December 10. If they miss that date, lawmakers plan to move forward with their own version anyway.
The current target is to pass the bill during the National Assembly’s extraordinary session in January. That means there’s internal coordination happening right now with the ruling People Power Party and the president’s office.
This new act builds on the Digital Asset Basic Act that passed earlier this year. That earlier legislation set up licensing standards for issuers, reserve protection rules, and compliance obligations for virtual asset service providers.
Filling regulatory gaps
What this new legislation does, I think, is fill in the remaining major gaps. It treats digital assets more like traditional financial products, which could provide clearer legal protections for users. It also sets ground rules for U.S.-based stablecoins, which is becoming increasingly important as global players like USDT and USDC continue to dominate the market.
Officials seem worried about timing. Crypto adoption in Korea keeps rising, especially among people aged 20 to 50. There’s concern that if domestic regulation gets delayed, local firms might fall behind markets like the U.S., EU, and Japan—all of which have tightened their stablecoin oversight this year.
Broader financial reforms
The meeting also covered separate bills on financial security and market transparency. Lawmakers plan to revise the Electronic Financial Transactions Act after several hacking incidents at major financial companies. The proposed changes include stronger penalties and better post-incident enforcement.
There’s also work happening on capital-market reforms. These include requiring mandatory tender offers in certain corporate situations and updating rules on how shares are allocated. The goal seems to be giving everyday investors fairer access to investment opportunities.
It’s interesting to see how all these pieces fit together. The stablecoin framework was the big sticking point, and now that it’s resolved, the rest of the legislation can move forward. But January is just around the corner, so they’ll need to work quickly to meet that timeline.
