- South Korean lawmakers are divided over the Digital Asset Basic Act.
- Failure to reach a consensus has delayed the passage of the Stablecoin bill.
- Decisions over bank involvement and shareholders’ status stall stablecoin bill passage.
The passage of South Korea’s Digital Asset Basic Act has stalled, according to an announcement from the nation’s digital asset task force. The ruling Democratic Party failed to reach an internal consensus on the details of the legislation, setting back the nation’s stablecoin regulation process.
Legislators Are Yet to Finalize on Key Decisions
According to reports, sensitive aspects of the bill, including the scope of the Bank of Korea’s authority and restrictions on major shareholders of crypto exchanges, are yet to be finalized. Task force chairman Lee Jeong-moon cited a sharp contrast in opinions on aspects of the bill that grant issuance rights for won-denominated stablecoins to consortia where banks hold a stake of over 51%.
In the meantime, Jeong-moon noted that the decision makers are waiting for feedback on a compromise plan sent to the Bank of Korea and the country’s Financial Services Commission. Meanwhile, the legislators also deferred a separate proposal to cap any major shareholder’s stake in an exchange at 15%. According to Jeong-moon, legislative strategy appears to be dominating the decision-making process despite a consensus on the regulation’s goals.
Uncertainty Looms Over South Korea’s Crypto Sector
The latest setback has created immediate uncertainty in South Korea’s rapidly growing digital asset sector. It has introduced doubts in the minds of crypto community members who have hitherto considered the region a pace-setter in blockchain innovation. Crypto stakeholders worldwide believe that establishing a clear regulatory framework will cement South Korea’s leadership in the crypto sector, considering advancements made since 2020.
It is worth noting that the current regulatory challenges that South Korea faces are not peculiar to the country. It is a common problem in the Asian cryptocurrency ecosystem, with most countries in the region grappling with digital asset governance. Although Japan has successfully implemented its stablecoin legislation, Singapore continues to refine its payment services framework.
In the meantime, South Korea’s ruling Democratic Party is reportedly planning to introduce a new version of the Digital Asset Basic Act before the Lunar New Year holiday next month, following further internal and government discussions.
Related: South Korea Crypto Regulation Delayed as Stablecoin Talks Drag
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
