South Korean Lawmakers Deadlocked Over Who Can Issue Won-Pegged Stablecoins
South Korean lawmakers remain deadlocked over rules for won-pegged stablecoins as the Digital Asset Basic Act is delayed. Bank of Korea Governor Lee Chang-yong warned at the Asian Financial Forum that won-backed stablecoins could undermine foreign-exchange controls and facilitate cross-border capital flows during market stress, raising FX and systemic risks. The central bank and some financial regulators favour restricting issuance to banks to limit currency and financial stability risks; industry groups and other lawmakers push to allow supervised non-bank firms to issue stablecoins as well. Negotiations over compromises — including a bank-led joint issuance model and revisions to exchange banking-partner rules — have stalled, delaying related measures such as rules on exchanges’ asset holdings, listed companies trading crypto, and the launch of spot crypto ETFs. With the won under depreciation pressure and possible large dollar outflows amid trade tensions, policymakers are weighing tighter issuer limits to curb potential capital flight. Key keywords: won stablecoins, stablecoin issuance, Bank of Korea, Digital Asset Basic Act, cross-border flows.
Neutral
The news is neutral for crypto prices because it focuses on regulatory uncertainty rather than an immediate operational shock. Limiting issuance of won-pegged stablecoins to banks would restrict issuance channels and could reduce adoption and on-chain liquidity for won-based stablecoins, which would be mildly bearish for any native won-stablecoin projects. However, the deadlock and delay in passing the Digital Asset Basic Act also maintain the status quo, preventing abrupt reforms that might disrupt markets or trigger rapid capital flows. Short-term impact: likely muted volatility as markets price in regulatory uncertainty and prolonged legislative debate. Traders might see increased spread or liquidity risk for won-linked pairs and stablecoins, and cautious positioning around Korean spot ETF approvals or exchange rule changes. Long-term impact: if policymakers eventually favor bank-only issuance, adoption and utility of won stablecoins could be constrained (bearish for won-stablecoin projects); if a supervised multi-issuer framework is adopted, that would be neutral-to-bullish by improving competition and infrastructure. Key signals for traders to watch: legislative progress on the Digital Asset Basic Act, central bank guidance on FX controls, announcements of issuer eligibility, and any concrete rules on exchanges’ holdings or spot ETF launches.