South Korea’s Financial Services Commission (FSC) announced on December 10 that it has delayed submitting a regulatory bill for won-denominated stablecoins, missing the government’s original deadline amid unresolved disagreements with the Bank of Korea (BOK).
The FSC failed to present the framework by the December 10 deadline, citing the need for additional time to align positions with relevant institutions. An FSC spokesperson said the regulator wants to avoid rushing the proposal and plans to publicly disclose the full contents at the same time it is submitted to the National Assembly, in the interest of transparency.
The ruling Democratic Party had initially pushed for the bill to be introduced in December, but negotiations have stalled.
Governance Dispute Between FSC and Bank of Korea
The primary cause of the delay is a fundamental disagreement over governance between the FSC and the central bank.
The Bank of Korea has taken a firm stance that won-based stablecoins should operate under a bank-led ecosystem to safeguard financial stability and preserve the effectiveness of monetary policy. Specifically, the BOK is calling for domestic banks to hold a majority ownership stake of 50–51% in any stablecoin issuer.
In addition, the central bank argues it should have veto power over stablecoin issuance and the authority to conduct inspections of issuers.
The FSC, however, opposes a strictly bank-led consortium model. It has pointed out that there are no major global precedents for bank-dominated stablecoin issuance, noting that in the European Union and Japan, fintech companies instead of banks are typically the primary issuers.
Market Impact and Legislative Outlook
Regulatory uncertainty is already influencing the market. In the second half of 2025, nearly half of the top 30 performing stocks in South Korea were related to stablecoins or digital payments.
Shares of companies such as ME2ON and Kakao Pay have risen sharply, reflecting investor expectations that regulatory clarity will unlock new growth opportunities.
However, policymakers remain divided. Overly lenient rules could introduce systemic risks, while excessive restrictions may stifle innovation.
Big Tech participation is another point of contention. The BOK has proposed limiting the role of large technology firms, while the Democratic Party’s proposed Digital Asset Innovation Act would allow companies with capital of just KRW 1 billion (approximately USD 750,000) to enter the stablecoin market. Critics warn that such a low threshold may be insufficient to ensure adequate safeguards.
Meanwhile, traditional financial institutions are moving forward. Eight of South Korea’s largest banks have announced a joint initiative under the Korea Federation of Banks to develop a won-based stablecoin, aiming to retain leadership in the country’s digital payments infrastructure.
The ruling party has pledged to submit the legislation by the end of January 2026, and the FSC is expected to publish its proposal by late December or early next month.
While the BOK is reportedly open to a compromise, limiting issuance to consortiums in which domestic banks hold at least 51% ownership, and the FSC has not publicly endorsed this model.
The outcome of this regulatory debate is expected to shape South Korea’s position in the global stablecoin race and could have broader implications for Asia’s financial ecosystem, with market participants also watching for potential spillover effects on Bitcoin prices and the Ethereum smart contract ecosystem.
