South Korea to Ban Stablecoin Yield Payments Under 2025 Crypto Law
South Korea's Financial Services Commission (FSC) will prohibit interest payments on stablecoins as part of sweeping digital asset regulations set for implementation by end-2025. The MOVE aligns with global regulatory trends, mirroring provisions in the U.S. GENIUS Act that separate payment stablecoins from banking products.
Banks will gain exclusive rights to issue stablecoins under the new framework, with fintech firms restricted to technical partnerships. crypto exchanges face outright bans on launching proprietary stablecoins—a structural shift that could reshape South Korea's $10B+ stablecoin market.
FSC Chairman Lee Eok-Won framed the yield prohibition as necessary financial infrastructure protection during October 20 parliamentary hearings. The phased legislation prioritizes payment and remittance use cases while establishing guardrails against systemic risks.
