South Korea’s ruling and opposition parties reached a breakthrough agreement on stablecoin regulation framework. According to the Maeil Business Newspaper, lawmakers aim to approve the full Digital Asset Basic Act by January 2026. The legislation establishes a “Korean-style stablecoin” employing a consortium structure where banks hold at least 51% equity. As minority stakeholders, technology companies are able to take part. The deadline for submitting government proposals was set by Democratic Party Representative Kang Jun-hyeon on December 10. The congressman warned that if financial authorities fail to meet the deadline, lawmakers will introduce an independent version. South Korea consortium model balances bank stability On November 1, the party-government council meeting focused on details regarding consortium structure. Kang confirmed the intensive discussions held on bank participation levels and equity stake requirements. The Democratic Party secretary asked for consultation without delay to narrow the differences between the Bank of Korea, the Financial Services Commission (FSC), and banking sector positions. South Korea’s model requires a majority equity of 51% from banks, which guarantees soundness. The structure also addresses Bank of Korea concerns regarding the threat from stablecoins to monetary status. The FSC emphasized the need to cut entry barriers for the fintech and non-banking sectors. Kang’s office said the search for a contact point considered both monetary policy stability and industrial innovation. The compromise came after months of delays drew government plan. Throughout the negotiation process, the Bank of Korea insisted on a bank-centered issuance model. Professor Hyun Jung-hwan of Dongguk University assessed bank-led issuance as a safety-oriented option. The former official at the Bank of Korea mentioned that banks already issue deposit currency; stablecoin operations are complex. Reserve requirements exceed deposits, while preventing use as loan funds removes the margin incentives. December 10 deadline triggers legislative action Representative Kang also clarified the timeline for the submission of government bills. The lawmaker insisted the FSC provide a proposal for a framework before December 10. If they fail to meet the due date, the secretary will lead a legislation drive through the National Policy Committee. The country is trying to finish the bill proposal within the regular National Assembly session. A bill passage aims at an extraordinary National Assembly session in January 2026. Kang said that a large market ripple effect needs coordination between the government and opposition parties until the end of January this year. Until now, several related bills have been proposed, including those by Representatives Kim Eun-hye, Ahn Dogul and Min Byeong-deok. Meanwhile, with the sluggish pace of progress so far, the coordination between the government and the ruling party has now become a big watershed. The meeting between the financial authorities and the political officials was held behind closed doors at the National Assembly building in Yeouido, Seoul. Members of the Democratic Party’s political affairs committee met with the FSC to discuss the direction of the Framework Act. Just after the meeting, it was confirmed that the consortium form would include the central bank, regulator, and banking positions. Discussion progress was greeted with favor from market participants after extended delays. Major countries including the United States, the European Union and Japan completed stablecoin system overhauls. FSC expands anti-money laundering framework On November 28, South Korea announced the expansion of its travel rule to include all transaction sizes. The FSC closed a loophole allowing smurfing through sub-1 million won transfers previously. This exemption threshold was anything less than approximately $680 and thus enabled transfer abuse by splitting. The new regulations enact comprehensive monitoring regardless of the individual transaction amount. High-risk offshore exchanges may be blocked from servicing South Korean users as a measure to protect domestic investors from international platforms that operate outside of the country’s regulations. The FSC determined that certain jurisdictions and operators posed heightened risk profiles. Such implementation prevents capital flight to non-compliant foreign services. Stricter requirements were received by the virtual asset service provider registration criteria. Enhanced standards have confronted financial reserves, internal controls, and compliance mechanisms. South Korea requires strong operational infrastructure before licensing approvals are granted. The heightened bar aims at professionalizing the cryptocurrency exchange sector. Professor Hyun stressed that strengthening supervision is necessary if large banks handle substantial volumes of stablecoins. With the surge in issuance, potential system risks increase that call for regulatory monitoring. A permanent channel for discussions between the FSC and the Bank of Korea was suggested. Ongoing coordination by authorities is needed for reserve requirements and issuance limits. Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
