South Korea’s Stablecoin Regulations Set to Reshape Payments Landscape

South Korean lawmakers are fast-tracking legislation that could redefine the country's payment ecosystem. The Digital Asset Innovation Act, expected next month, will establish strict capital requirements for stablecoin issuers—mandating at least ₩1 billion ($720,000) in equity. This effectively sidelines smaller players while favoring tech giants and well-funded enterprises.

Payment processors face existential pressure as stablecoins threaten to erode credit card transaction volumes. Default rates at major card issuers—including KB Kookmin, Hana, and BC Card—have already breached 2% this year, amplifying sector vulnerabilities. Meanwhile, the Bank of Korea maintains cautious opposition, warning of potential disruptions to traditional banking infrastructure.