South Korea’s FSC To Prohibit Stablecoin Interest Payments In Upcoming Framework
South Korea’s Financial Services Commission (FSC) will reportedly follow US regulatory steps and include a ban on stablecoin interest payments in its highly anticipated framework, expected to be released later this year.
During a National Assembly’s Government Affairs Committee audit, FSC Chairman Lee Eun-won affirmed that the regulatory agency will "fundamentally prohibit the payment of interest on stablecoins as a principle." The MOVE aims to block interest payments on digital assets pegged to the Korean won (KRW) "in any form," responding to concerns raised by lawmakers.
In July, South Korea’s ruling and opposition parties proposed rival bills to regulate won-pegged digital assets. While both assigned oversight to the FSC, they diverged on interest payments—the People Power Party’s bill allowed them to incentivize overseas use, while the Democratic Party of Korea sought a blanket ban to prevent market disruption.
