According to a policy analysis by Hashed Open Research and the Solana Policy Institute, South Korea may implement stablecoin laws prior to finishing its more comprehensive Digital Asset Basic Act. While policymakers continue to develop a comprehensive framework for digital assets, the paper recommends establishing provisional guidelines for stablecoin producers.
Following a symposium on June 23 that brought together legislators, legal professionals, and members of the digital asset market, the report was released on July 29. It suggests a tiered strategy centered on payment services, regulations for tokens issued outside, and stablecoin issuance.
Stablecoin issuance, disclosures, market regulations, investor protection, and operating standards will all be covered. However, debates about who should be permitted to create stablecoins and how much authority banks should have slowed down negotiations.
South Korea Plans Early Stablecoin Rules To Reduce Market Uncertainty
According to the research, businesses wishing to establish stablecoin services may experience uncertainty if they wait for the complete legislation. Before the final law is introduced, it suggests interim licensing guidelines to help firms understand what is allowed.
South Korea might take a similar approach to the European Union’s Markets in Crypto-Assets Regulation (MiCA), where stablecoin regulations were announced prior to the framework’s full implementation, according to legal expert Kim Hyo-bong of Bae, Kim & Lee. He also emphasized the necessity for more precise regulations regarding foreign-issued stablecoins, financial institutions’ participation, and stablecoin payments.
FSC’s Digital Asset Basic Act Could Reshape South Korea’s Stablecoin Industry
Ahn Do-geol, a member of the Democratic Party, stated that lawmakers are thinking about a potential compromise in which banks retain the majority ownership while fintech companies or other non-bank businesses manage operations. Supporters think this strategy might allow technology businesses to contribute their skills while offering more robust supervision.
Strict bank ownership regulations, according to some industry players, may stifle competition and innovation. Citing worries about foreign exchange management, financial stability, and possible effects from simpler conversion between won and foreign stablecoins, the Bank of Korea has backed a bank-led strategy.
Additionally, twelve pending proposals for stablecoins and digital assets would be combined into a single framework under the Digital Asset Basic Act, according to plans made by the Financial Services Commission (FSC). Stablecoin circulation, exchange operations, disclosures, internal controls, and system security could all be covered by the anticipated regulations.
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