South Korea report proposes stablecoin rules before crypto law
A South Korea report proposes stablecoin rules before the country's Digital Asset Basic Act is complete. Published by Hashed Open Research and the Solana Policy Institute, it calls for interim licensing guidance, greater issuer flexibility, and phased rules. Disputes over who can issue stablecoins are still delaying the wider crypto framework.
Key Takeaways
- Hashed Open Research and the Solana Policy Institute say stablecoin regulation should start before the Digital Asset Basic Act is finished.
- The report urges interim licensing guidance and greater flexibility for stablecoin issuers.
- Lawmakers have not reconciled competing bills, with disputes over stablecoin issuance slowing progress.
- A possible compromise would keep banks as majority owners while fintech and non-bank firms run operations.
- Legal experts point to the EU Markets in Crypto-Assets phased rollout as a model.
The findings, published Wednesday, summarize a June 23 symposium that brought together lawmakers, legal experts and industry participants. For more coverage in this beat, see our Fintech & Crypto Alerts hub.
What does the South Korea report propose?
According to Cointelegraph, the policy paper argues South Korea should allow greater flexibility for stablecoin issuers and provide interim licensing guidance.
It also recommends phasing in stablecoin regulation ahead of completing the Digital Asset Basic Act, rather than waiting for the full legislative package.
That Act is intended to establish South Korea's first comprehensive digital asset framework. It would cover stablecoins, issuance, disclosures and market rules once lawmakers agree on a final text.
Why are stablecoin rules delaying the wider crypto law?
Multiple bills remain unreconciled. Disagreements over stablecoin issuance are among the factors delaying the Digital Asset Basic Act.
Democratic Party lawmaker Ahn Dogeol said policymakers were considering a compromise under which banks would retain majority ownership while fintech and non-bank firms managed operations.
That ownership and operations split is one option under discussion while lawmakers work through competing bills.
How could interim licensing guidance help issuers?
Kim Hyobong, a partner at Bae, Kim & Lee, said South Korea should clarify which crypto activities financial institutions may conduct.
He also said the country should resolve licensing uncertainty for stablecoin payments and set rules for foreign-issued stablecoins.
Kim urged South Korea to follow the European Union's phased rollout of the Markets in Crypto-Assets Regulation by introducing stablecoin issuance rules ahead of the Digital Asset Basic Act.
Under that approach, issuance rules would come first, while work continues on the broader digital asset statute.