- Financial Services Commission was told to meet a December 10 deadline.
- Central bank wants a veto over issuance approvals, regulator says no.
- Row about whether big tech firms can issue stablecoins continues.
South Korea’s top financial regulator has missed a government deadline as South Korea’s leadership battles to legalize stablecoins.
Earlier this month, the ruling Democratic Party called upon ministries and the Financial Services Commission, or FSC, to submit a regulation bill for won-pegged stablecoins by December 10.
The ruling party has committed to introducing a bill by the end of January 2026, in line with manifesto promises from President Lee Jae-myung.
But the FSC, the South Korean media outlet Newsis reported, says that it will instead “soon make public” the terms of a bill tentatively titled the Basic Digital Asset Act.
“We were unable to submit a proposal within the requested timeframe,” a FSC spokesperson told reporters. “The simple fact is that the FSC needed more time to coordinate its position with the relevant agencies.”
Time is running out for the Democratic Party, which has made repeated promises about stablecoin regulations, with the private sector continuing its long wait for permission to launch KRW-pegged tokens.
At present, all forms of cryptocurrency and stablecoin issuance remain illegal on South Korean territory. But Seoul thinks that allowing firms to issue stablecoins will help them catch up with their rivals in the US and Japan.
“The ruling party [has effectively committed] to publishing a consolidated bill in January next year,” Newsis wrote. “Considering this fact, the FSC’s proposal is expected to be made public as before the end of this month or early next month at the latest.”
The FSC says that instead of rushing to meet the party’s deadline, it has instead decided to announce its proposal “simultaneously” with the bill’s submission to the National Assembly.
The spokesperson explained that this was part of the FSC’s attempt “to protect the public’s right to know” about the matter.
However, the FSC’s comments come at a time of considerable tension between the government and the Bank of Korea, or BOK.
The BOK has expressed vociferous doubts about Lee’s plans, claiming that letting big tech firms issue their own coins will undermine its power and control over monetary policy. The government has reacted with anger to the BOK’s stance.
The FSC has found itself in the middle of this struggle. One proposed compromise, reportedly endorsed by the BOK, would involve a law that stipulates that only consortia where domestic banks have a 51% or higher stake can issue stablecoins.
The regulator has taken issue with this line of reasoning, citing a lack of global precedents for bank-led stablecoin issuance.
The FSC has pointed to the EU and Japan, noting that the vast bulk of stablecoin issuers in these two jurisdictions are fintech companies.
The BOK also wants the power of veto in all stablecoin issuance approval decisions. And it wants regulatory powers, including the ability to conduct spot checks of issuers.
However, the FSC is reluctant to agree. The regulator said that its own approval should suffice, and added that the BOK does not need any such powers.
Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
