South Korea Drafts Comprehensive Stablecoin Bill to Tighten Issuer Rules and Exchange Ownership
South Korea’s ruling Democratic Party is consolidating five prior proposals into a single stablecoin bill via its Digital Asset Task Force led by lawmaker Lee Jeong-moon. The draft, aimed for committee discussion next month, focuses on: defining qualified stablecoin issuers, setting reserve and audit requirements, imposing limits on major shareholder stakes in exchanges, and technical rules for interoperability and cross-border usage. The move builds on the Virtual Asset User Protection Act and responds to past market incidents and global frameworks such as the EU’s MiCA. Expected outcomes include clearer compliance paths for banks and fintechs, stronger consumer protections, and potential shifts in exchange market structure. The legislation’s design—balancing innovation with risk mitigation—could attract institutional participation but may disrupt concentrated exchange ownership. Key keywords: stablecoin regulation, issuer qualifications, exchange ownership limits, reserve requirements, South Korea.
Neutral
The draft stablecoin bill increases regulatory clarity—typically a positive for institutional entry—while also imposing constraints (issuer qualifications and exchange ownership limits) that could temporarily disrupt incumbent business models. In the short term, markets may see muted volatility: traders could react to uncertainty about which firms qualify to issue stablecoins and how ownership limits affect major exchanges. Past events show that clearer rules (e.g., EU MiCA progress) tend to be neutral-to-bullish for onshore crypto markets as they reduce legal risk and attract institutional flows, but restrictive provisions can be bearish for affected firms. Over the long term, well-calibrated regulation that includes reserve/audit rules and interoperability standards should bolster market stability and institutional adoption—a bullish structural outcome. Given mixed immediate signals (clarity vs. restrictions), classifying the impact as neutral best reflects likely short-term uncertainty with positive long-term potential.