South Korea’s Stablecoin Legislation Stalls Amid Regulatory Dispute
South Korea's Financial Services Commission missed its December 10 deadline to submit stablecoin legislation, exposing fractures between regulators and the central bank. The delay jeopardizes Phase Two of the VIRTUAL Asset User Protection Act, which seeks to establish standards for won-pegged stablecoins.
At issue is whether commercial banks should act as intermediaries for stablecoin issuance—a point of contention between the FSC and Bank of Korea. The impasse reflects broader tensions as jurisdictions worldwide grapple with balancing innovation against financial stability.
Market observers note the delay comes as global standards crystallize, with Japan and Singapore implementing stablecoin frameworks this year. The setback may disadvantage Korean fintech firms competing in the $150 billion stablecoin sector.
