South Korea's Digital Asset Basic Act Faces Delay Over Stablecoin Issuance Dispute
The South Korean Digital Asset Basic Act (DABA), which aims to regulate cryptocurrency trading and issuance following a nine-year crypto ban, is currently stalled due to disagreements about who should be authorized to issue KRW-pegged stablecoins.
The Bank of Korea (BOK) has proposed a requirement that only banks with majority ownership — at least 51% — can issue stablecoins, citing the need for stability and anti-money laundering safeguards. Conversely, the Financial Services Commission (FSC) has argued against the 51% ownership rule, warning that it could hinder innovation and competition. The FSC points to regulatory frameworks like the European Union’s Markets in Crypto-Assets (MiCA) and Japan’s fintech-led stablecoin initiatives as examples of regulated innovation without such restrictive ownership requirements.
Further opposition has emerged from the ruling Democratic Party of Korea and policy advisors, who express concerns over the lack of global precedents for such a sector-specific 51% ownership rule. They warn that this approach may negatively impact innovation in the stablecoin sector.
Regarding foreign-issued stablecoins, they could be allowed only if licensed and operating through a Korean local branch or subsidiary. This means issuers such as Circle, which issues the USDC stablecoin, would be required to establish a local presence to operate in Korea.
The current deadlock over these issues is likely to delay the passage of the DABA to January 2026, with full implementation of the law considered unlikely before the year 2026.
