South Korea is inching closer to issuing a landmark stablecoin bill.

The ruling Democratic Party has demanded that the government submit a new bill to regulate won-pegged stablecoins by December 10.

Kang Jun-hyun, the floor leader of the Democratic Party’s Political Affairs Committee, said the draft bill will only allow a consortium with at least a 51% stake in commercial banks to issue fiat-pegged tokens, the South Korean publication Hanguk Kyungjae reported.

“The controversial issue of who will be allowed to issue stablecoins has been resolved using a consortium format,” said Kang. “This will help align the positions of the Bank of Korea, the Financial Services Commission, and the banking industry.”

If the government fails to act, Kang said that the National Assembly, South Korea’s unicameral legislature, will take the lead and push through the legislation.

If approved, the bill would cap a long-running war of words over stablecoin issuance.

The Democratic Party’s ultimatum also highlights the race to introduce stablecoin legislation that has swept over the globe this year. After the US and EU both introduced laws to regulate fiat-pegged cryptos, other countries are following suit.

And understandably so: The total value of all stablecoins is expected to grow more than tenfold to hit $4 trillion by 2030.

Manifesto pledge

The question of stablecoins has become a red button issue in South Korea after the Democratic Party made legislating the asset class a key manifesto pledge ahead of June’s presidential election.

But the Bank of Korea, or BOK, has been reluctant to let big tech firms, such as the internet giants Naver and Kakao, issue stablecoins. A similar hesitance towards stablecoins has been voiced by central banks across the globe.

While commercial banks support the BOK’s position, the Financial Services Commission has sided with the Democratic Party.

Hence, the new proposal seeks to limit stablecoin issuance to consortia where commercial banks have a stake of at least 51%.

The new proposal, Hanguk Kyungjae wrote, is the result of a December 1 closed-door meeting at the National Assembly between commission chiefs and senior Democratic Party lawmakers.

Regulator doesn’t commit

It’s unclear what the different parties agreed on in that meeting, however.

While Kang said that lawmakers and the regulator had reached a consensus on the matter, the Financial Services Commission later issued a statement declaring that “nothing has been finalised with regard to the consortium proposal.”

Despite the tight timeline demanded by the Democratic Party, Kang conceded that stablecoin issuance is “an issue with significant market ramifications,” and that “discussions are likely to continue until January.”