South Korea’s Democratic Party, led by newly elected President Lee Jae-myung, is shaking up the crypto landscape with a bold legislative proposal. The Digital Asset Basic Act, submitted to parliament just this week, seeks to allow companies to issue their own stablecoins—a move aimed at boosting transparency and competition within the country’s burgeoning cryptocurrency market. With a minimum equity capital requirement set at 500 million won ($368,000), along with mandatory reserves to guarantee refunds, the bill also mandates approval from the Financial Services Commission.
A New Era for South Korean Crypto
South Korea, a nation with a staggering 15 million crypto investors, is no stranger to digital innovation. President Lee, who was sworn in last week, has been a vocal advocate for the crypto sector, promising robust support for a won-based stablecoin market. “It’s about safeguarding national wealth,” he reportedly emphasized, aiming to prevent financial assets from slipping out of Korean hands.
Stablecoins, those digital tokens pegged to traditional financial assets like fiat currencies, have gained traction globally for their stability. In a world where the volatility of cryptocurrencies like Bitcoin and Ethereum can unsettle even the most seasoned investors, stablecoins offer a safe haven. The U.S. dollar-backed Tether (USDT) currently leads the pack, but South Korea’s potential entry into the stablecoin market adds an intriguing twist to the ongoing narrative. This follows recent developments like Visa and Baanx’s launch of USDC stablecoin payment cards, highlighting the growing integration of stablecoins in everyday transactions.
The Stakes and the Players
The global stablecoin sector is having a moment. Just look at Circle’s recent IPO, where shares skyrocketed over fourfold in mere days. The market cap of the stablecoin sector has soared to an unprecedented $250 billion, a testament to its growing significance and investor confidence. As South Korea prepares to join these ranks, the potential for a won-backed stablecoin could not only energize local markets but also influence international trends. This is reminiscent of Ripple’s substantial offer for stablecoin issuer Circle, indicating the high stakes and competitive nature of the stablecoin arena.
Analysts are cautiously optimistic. “South Korea’s entry could diversify the stablecoin ecosystem,” noted crypto analyst Hiroshi Tanaka. “However, the regulatory landscape must be navigated carefully to ensure trust and stability.” The requirement for significant equity and regulatory approval underscores a commitment to maintaining a secure financial environment.
Looking Ahead
As the world watches South Korea’s legislative proceedings, the potential implications are vast. A successful rollout could position the nation as a crypto hub in Asia, attracting more innovation and investment. Yet, questions linger. Can the proposed regulations balance innovation with security? Will the Financial Services Commission’s oversight be stringent yet flexible enough to foster growth?
For now, the crypto community can only speculate on the ripple effects of South Korea’s foray into stablecoins. The real test lies in implementation—how swiftly and effectively these regulations can transition from paper to practice. As the summer of 2025 unfolds, all eyes will be on Seoul, where the future of digital finance might just be taking shape.
Source
This article is based on: South Korea’s Ruling Party Wants to Allow Companies to Issue Stablecoins: Bloomberg
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
