The ruling Democratic Party in South Korea has urged the government to expedite regulations governing the local stablecoin market. They set a hard deadline, demanding the Financial Services Commission (FSC) to present a draft bill by December 10th. Should the FSC miss this deadline, the party plans to advance the legislation through parliamentary initiative, aiming for its introduction during the current session and a subsequent vote by January 2026.
Proposed Consortium Model for Stablecoin Issuance
Democratic Party Secretary Kang Jun-hyeon insisted to the FSC on the necessity of rapid action. Addressing any potential delays, he warned that legislative proposals would move forward at a committee level. In a recent private meeting, party officials and FSC representatives examined a novel issuance model, suggesting a partnership involving the Central Bank, FSC, and local banks to collaboratively issue stablecoins.
Kang conveyed that the proposal envisions banks maintaining a minimum 50% stake in the consortium. However, the FSC reported no definitive decisions were reached in the meeting, and efforts continue to establish precise technical and jurisdictional guidelines.
Impact on National Economic Strategy
President Lee Jae Myung had prioritized stablecoin regulation in his campaign, concentrating on a won-based crypto market to bolster national monetary sovereignty. This strategy aims to reduce the influence of U.S.-based stablecoins, typically tied directly to the dollar.
Although significant legislative strides have yet to be made, discussions about a bank-inclusive issuance model indicate a sustained belief by the Central Bank. They maintain that only regulated banks should have the authority to issue stablecoins. Such a structure seeks to ensure financial stability while allowing a controlled arena for private crypto innovation.
Key developments from this initiative include:
- •A hard deadline of December 10th for the FSC to draft a regulatory bill on stablecoins.
- •The Democratic Party’s readiness to move forward with legislative processes if delays arise.
- •A proposed consortium model involving at least 50% bank ownership, emphasizing regulated participation in stablecoin issuance.
- •Ongoing efforts to define the specific regulatory technicalities and jurisdiction for stablecoins.
The stablecoin regulation agenda is a pivotal element in the current administration’s financial and technological strategy. As actions progress, market watchers are keen on whether these regulatory efforts will fortify South Korea’s financial autonomy against foreign crypto influences.