South Korea’s effort to set up official rules for won-based stablecoins has been delayed, which is pushing back expectations for new oversight until the end of 2025.
Ongoing disagreements between the Bank of Korea and government regulators have brought the process to a standstill, according to a report by the Korea JoongAng Daily.
The central bank maintains that banks should control at least 51% of any company issuing these stablecoins, while other officials are interested in letting a wider range of firms participate.
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Officials at the Bank of Korea argued that bank-run stablecoin launches would be safer because banks already follow strict rules and anti-money-laundering checks.
Currently, the Political Affairs Committee is considering three proposals: two from members of the Democratic Party of Korea and one from the main opposition. The bills differ in their requirements, including how much money issuers must hold and whether interest is allowed on user balances.
Each proposed bill requires stablecoin issuers to have at least 5 billion won ($3.4 million) in capital. However, the rules on paying interest vary: one bill would allow interest payments to holders, while the other two would ban interest completely.
South Korean tech players are also becoming more active in the industry. Naver Financial, which recently announced plans for a possible merger with Dunamu, the company behind Upbit
$2.13B
, is expanding its stablecoin activities.
The company plans to introduce a stablecoin wallet in partnership with Hashed and the Busan Digital Exchange in December.
Recently, the European Central Bank (ECB) reported that stablecoins do not currently pose risks to financial stability in the euro area. How? Read the full story.
