South Korea’s stablecoin bill stalls over issuer eligibility dispute: report

South Korea's proposed Digital Asset Basic Act, intended to impose strict investor protection rules on stablecoin issuers, has been postponed until next year because financial authorities are deadlocked over eligibility requirements. The proposal mandates that issuers hold reserves in bank deposits or government bonds and entrust 100% of these assets with custodians like banks to prevent bankruptcy risks from affecting investors. Furthermore, digital asset service providers would face disclosure and advertising standards similar to traditional finance, with potential liability for damages from system failures regardless of fault. The primary dispute lies between the Bank of Korea (BOK), which wants issuance restricted to a bank-led consortium (51% bank stake), and the Financial Services Commission (FSC), which opposes rigid ownership thresholds to encourage tech firm participation and innovation. They also disagree on establishing a new licensing consultative body. This legislative delay comes as newly elected President Lee Jae Myung prioritizes developing a Korean won-stablecoin market to counter the dominance of U.S. dollar stablecoins.

(Source：The Block)