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South Korea Proposes Legislation for Won-Pegged Stablecoins Amid Regulatory Dispute

The Democratic Party of Korea introduces a bill to regulate stablecoins, addressing the entire ecosystem of issuance, circulation, and supervision.

Summary

On July 28, the Democratic Party of Korea proposed a bill to institutionalize stablecoins, presenting the "Draft Law on the Issuance and Circulation of Value-Stable Digital Assets." This marks the first comprehensive regulation of the Korean won stablecoin ecosystem, following previous discussions on digital asset legislation. Concurrently, concerns from the Korean Bankers' Union about the risks of stablecoins persist, likening them to disguised deposit-taking businesses.

Terms & Concepts
  • Stablecoins: Cryptocurrencies designed to maintain a stable value by pegging to a reserve asset, such as a fiat currency.
  • Financial Supervisory Service (FSS): The regulatory body in South Korea responsible for overseeing financial institutions and ensuring market stability.
  • Capital Outflow: The movement of assets out of a country, which can impact the local economy and currency value.