Financial Services Commission to Submit Stablecoin Legislation in October, Establishing a Comprehensive Regulatory Framework
According to South Korean media outlet MoneyToday, the Financial Services Commission (FSC) is expected to submit a stablecoin regulatory bill to the National Assembly in October as part of the country’s second phase of virtual asset user protection laws. Ruling party lawmaker Park Min-kyu stated during a stablecoin-related discussion on Monday that he has received a report from the FSC regarding this plan, and the government bill is anticipated to be submitted to the National Assembly around October.
The bill will establish relevant requirements for stablecoin issuance, collateral management, and internal risk control systems. Since 2023, the FSC has been working through its Virtual Asset Committee to develop this framework, aiming to set clearer rules for domestic cryptocurrency service providers.
President Commits to Establishing a KRW-Backed Stablecoin Market; Four Major Banks to Meet with Circle
Newly elected President Yoon Suk-yeol promised during his campaign to create an active local currency-pegged stablecoin market to strengthen monetary sovereignty in the digital financial era. This initiative has received positive responses from the industry, with local banks and payment companies applying for stablecoin trademarks and preparing to offer services related to digital currencies.
The four major banks in South Korea—KB Kookmin, Woori, Shinhan, and Hana—are reviewing a potential meeting with Circle President Heath Tarbert, who is set to visit South Korea next week. These banks are actively preparing for the issuance of a KRW-pegged stablecoin, with related tokens expected to debut by the end of 2025 or early 2026.
Central Bank Takes a Cautious Stance, Emphasizing Bank-Dominated Issuance Models
Despite the government’s proactive push for KRW stablecoin development, the Bank of Korea has expressed cautious remarks regarding the potential risks associated with the KRW-pegged stablecoin market.
Bank of Korea Governor Lee Chang-yong stated last month that the issuance of KRW stablecoins should be limited to licensed banking institutions, as irresponsibly approving multiple stablecoins could undermine the country’s strict foreign exchange policies.
Bank of Korea Vice Governor Yoo Sang-dae remarked, “It is desirable to first allow highly regulated banks to issue KRW-based stablecoins and then gradually expand capabilities to the non-bank sector based on experience.” The Bank of Korea has slowed its Central Bank Digital Currency (CBDC) project, suspending the planned pilot program originally set for the end of 2025, and is now supporting a “bank-first” stablecoin model.
Intensifying Global Competition Drives Legislative Process to Reduce Reliance on Dollar-Pegged Stablecoins
This legislative effort is a response to U.S. President Trump’s mission to strengthen the dollar’s global hegemony through stablecoins. Last month, Trump signed the GENIUS Act, creating a federal regulatory framework for stablecoins. Neighboring Japan is also set to launch its first yen-denominated stablecoin, with local fintech company JPYC anticipating issuance approval as early as this fall.
According to data from the asset tokenization tracker RWA.xyz, the total market capitalization of stablecoins is $266.7 billion, with dollar-pegged stablecoins continuing to dominate 99.8% of the market at $266.3 billion.
Total market capitalization of stablecoins stands at $266.7 billion
Image / RWA.xyz
Local industry stakeholders indicate an urgent need to introduce a KRW-pegged stablecoin to reduce dependence on dollar-based stablecoin tokens. The KRW is the second-largest fiat currency used in global cryptocurrency trading, with a trading volume of $663 billion year-to-date, accounting for approximately 30% of global fiat cryptocurrency activity.
This article is collaboratively republished from: Crypto City