South Korea to Propose Stablecoin Consolidation Bill

• South Korea plans one bill covering stablecoins, exchanges, and user safeguards.
• Lawmakers still need to settle issuer ownership and exchange equity limits.
• South Korea trails active regimes across the US, EU, Hong Kong, and Abu Dhabi.

South Korea’s Financial Services Commission plans to propose a consolidated digital asset bill covering stablecoins and wider market rules.

FSC Chairman Lee Eog-weon presented the plan during a National Assembly Political Affairs Committee meeting on July 29. The hearing marked the regulator’s first business report after lawmakers formed the committee’s new second-half membership.

According to the advance report, the FSC will work with the ruling party on one government-backed legislative proposal. However, officials have not confirmed the submission date or final structure. 

The legislation will form the second phase of South Korea’s digital asset framework. Lawmakers introduced the first phase through the Virtual Asset User Protection Act, which took effect in July 2024.

That law established rules for protecting customer assets, monitoring abnormal transactions, and investigating unfair trading. The FSC said authorities reported or referred more than 30 suspected market-abuse cases during the law’s first two years. 

Unified Bill Covers Industry, Markets and Users

The planned framework will divide its requirements across three areas covering the industry, market operations, and users.

Industry provisions will define digital asset businesses and establish conduct rules for regulated companies. They will also create a legal structure for issuing and distributing stablecoins.

Meanwhile, user provisions will require stronger internal controls and information technology systems. The FSC intends to align those standards with controls used across traditional financial institutions. 

Additionally, the government plans to strengthen anti-money laundering rules for stablecoin transactions. The measures form part of its second-half policy program for digital assets.

South Korea currently has ten digital asset and stablecoin bills pending before the National Assembly. Lawmakers from both the Democratic Party and People Power Party submitted separate proposals.

Political Affairs Committee Chairman Yoo Dong-soo has asked the FSC to deliver its government draft quickly. Committee leaders also agreed to hold each of two legislative subcommittees twice monthly. 

The government aims to complete the Digital Asset Framework Act during 2026. Earlier FSC discussions also covered exchange controls, compensation responsibilities, and operational safeguards under the proposed second-phase legislation. 

Stablecoin Issuer Structure Stays Unresolved

Several provisions still require agreement among financial regulators, lawmakers, and the Bank of Korea. One issue concerns the companies allowed to issue won-backed stablecoins. Discussions have considered bank-led consortiums where banks own more than half of the issuing company.

However, the FSC has not formally adopted that structure. In January, the regulator said officials had not settled the issuer model or other major second-phase provisions. 

Another issue concerns ownership limits for domestic crypto exchanges. Policymakers have discussed applying equity caps between 15% and 20% to major exchange operators.

Such rules could affect companies operating Upbit, Bithumb, Coinone, Korbit, and Gopax. Still, the FSC has not published a final government position on those limits. 

Officials are also reviewing broader access to the corporate crypto market. South Korea restricted financial companies from holding stakes in virtual asset businesses through its separation policy introduced in 2017.

The FSC plans to coordinate any market-opening guidelines with the second-phase legislation. Therefore, stablecoin rules, corporate participation, and exchange ownership could move through the same legislative process. 

Related: South Korea Arrests Three Suspects Over Fake Flare Network XRP Scam

Global Markets Already Apply Different Models

South Korea’s proposed structure differs from the narrower stablecoin framework adopted by the United States. The US GENIUS Act became law in July 2025. It allows insured bank subsidiaries, qualified federal nonbanks, and approved state issuers to issue payment stablecoins.

By contrast, the European Union regulates stablecoins within the broader Markets in Crypto-Assets framework. MiCA covers issuers, service providers, asset-referenced tokens, and electronic money tokens across member states.

The European Union implemented the framework during 2024. It also applies governance, reserve, liquidity, and supervisory requirements across the common market. 

Hong Kong uses a dedicated licensing system for issuers of fiat-referenced stablecoins. Its Stablecoins Ordinance took effect on August 1, 2025, under the Hong Kong Monetary Authority’s supervision.

The territory also restricts the public offering of regulated stablecoins to approved issuers and permitted distributors. 

Meanwhile, Abu Dhabi Global Market treats fiat-referenced token issuance as a regulated financial activity. Its framework covers reserve assets, capital requirements, independent attestations, disclosures, and redemption rights.

Singapore has also worked on separate stablecoin legislation focused on reserve backing and reliable redemption. South Korea’s proposal would combine several approaches within one framework. It would regulate stablecoin issuance alongside exchanges, disclosures, market conduct, internal controls, and user protection.

The FSC must still publish the government draft, confirm the stablecoin issuer structure, and settle the proposed exchange ownership rules.