South Korea Cracks Down: Stricter Stablecoin Regulations Coming in 2025
Seoul tightens the screws—new rules aim to tame the wild west of stablecoins.
Regulators aren’t playing nice. The Financial Services Commission (FSA) wants full reserve backing, mandatory audits, and kill switches for issuers. No more "trust me, bro" collateral.
Why now? After Terra’s meltdown, Korea’s been itching to avoid another $40B disaster. But let’s be real—banks love crypto chaos. More volatility means more fees.
Market impact? Expect short-term FUD, long-term legitimacy. Exchanges are sweating, but institutional money’s already licking its chops. Nothing like government stamps to turn skeptics into bagholders.
Closing thought: If history repeats, these rules will be outdated before the ink dries. The crypto hydra always grows two new loopholes for every one cut off.
The Financial Services Commission (FSC) of South Korea is set to present a draft regulatory framework for stablecoins to the National Assembly in October. Park Min-kyu, a member of the ruling party, confirmed that he received this information from the FSC during a stablecoin-focused meeting. The draft includes provisions related to issuance rules, collateral management, and internal risk control systems, and it aims to be part of a second comprehensive cryptocurrency regulatory package.
ContentsComponents of the October-Scheduled Stablecoin DraftDevelopments in Neighboring JapanComponents of the October-Scheduled Stablecoin Draft
The draft, as reported by MoneyToday, seeks to clarify the obligations of stablecoin issuers, how collateral should be maintained, and how risks should be monitored. According to Park Min-kyu, the FSC aims to submit these regulations as part of a single, cohesive package to the legislative body by October, marking another significant wave of regulation for the nation’s crypto market.
The meeting drew participation from representatives of South Korea’s largest internet companies, including Naver and Kakao, as well as major banks. Some participants suggested establishing a common network between the payment sector and banking to foster innovation and interoperability.
The newly elected president, Lee Jae Myung, has pledged to boost the domestic stablecoin market pegged to the local currency, thereby strengthening monetary sovereignty in the digital finance era. Banks and payment companies have begun to secure trademarks for stablecoin brands and prepare related services.
According to Yonhap, South Korea’s four major banks (KB Kookmin, Woori, Shinhan, and Han) are considering discussions with Heath Tarbert, President of Circle, a USDC issuer, who is scheduled to visit the country next week.
However, the Bank of Korea remains cautious. Governor Lee Chang-yong has advocated that stablecoin issuances pegged to the South Korean won should be restricted to licensed banks. Lee cautions that reckless approvals could disrupt the country’s stringent foreign exchange policies.
Developments in Neighboring Japan
In neighboring Japan, the launch of the first yen-pegged stablecoin is also gaining momentum. According to a Sunday report by Nikkei, fintech company JPYC anticipates regulatory approval for issuance as soon as the fall.
Regional activity has increased, notably with the enactment of the Genius Act in the United States last month. Aligned with former President Donald Trump’s efforts to bolster the dollar’s global supremacy through stablecoins, the law provides a federal-level regulatory framework for stablecoins in the U.S.
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