South Korea advances Phase‑2 virtual asset bill — won stablecoin rules, capital requirements and exchange ownership caps

South Korea’s ruling Democratic Party is fast‑tracking a Virtual Asset Phase‑2 bill to set comprehensive rules for won‑pegged stablecoins and limits on major shareholders of crypto exchanges ahead of the Lunar New Year. Key proposals include a statutory minimum capital of 5 billion won (~$3.46M) for stablecoin issuers, shareholder caps for exchange owners (proposed 15%–20%), and a new inter‑ministerial Virtual Asset Committee chaired by the Financial Services Commission. The Bank of Korea (BoK) is pushing for stricter controls: it wants banks to hold majority ownership (50%+1) of KRW stablecoin issuance and is exploring a domestic issuer registration system to protect monetary policy and capital controls. The Financial Services Commission and industry groups favour allowing private tech firms to issue stablecoins to speed market entry; the People Power Party opposes tight shareholder limits citing risks of capital flight and governance disruption. Remaining debates include central bank authority, limits on major shareholders, and whether issuance should be restricted to bank‑led consortia. The bill aims to align stablecoin treatment with electronic‑money standards and adds mechanisms to coordinate responses to hacks, system failures and large market disruptions. Traders should note several likely market effects: possible reduction in the number of private stablecoin issuers, slower rollout of new KRW stablecoins if banks are mandated, increased regulatory compliance costs and stronger balance sheets among issuers, and potential shifts in institutional participation depending on final rules. The timeline is short — sponsors aim to submit the bill for deliberation before Feb 17, 2026 — so outcomes could swiftly affect issuance, liquidity and on‑shore institutional activity in KRW stablecoins.