South Korea’s Democratic Party Pushes Crypto Regulation Amid Stablecoin Debate
South Korea's Democratic Party is accelerating Phase 2 crypto legislation, targeting stablecoin oversight and exchange shareholder limits. The proposed Virtual Asset Phase 2 Act, slated for pre-Lunar New Year tabling, mandates ~$3.46 million minimum capital for stablecoin issuers while debating bank versus tech firm issuance of won-pegged tokens.
Regulatory friction centers on two fronts: whether banks should control 50%+1 of stablecoin issuance—a stance championed by the Bank of Korea—and if exchange ownership caps of 15%-20% for major shareholders strike the right balance between competition and consolidation risks.
Industry warns delays could isolate South Korea's crypto markets as global standards evolve. The legislative impasse over issuer structure now threatens to derail the timeline, with the Digital Assets Task Force divided on banking sector dominance.
