Summary
- South Korea plans one cryptocurrency bill covering stablecoins, exchanges, investor protection, and market oversight under a unified legal framework nationwide.
- Regulators are still reviewing stablecoin issuer eligibility, exchange ownership limits, and broader corporate participation.
- Global regulatory models differ as the United States, European Union, Hong Kong, and Singapore apply separate digital asset approaches.
South Korea’s Financial Services Commission is advancing a unified cryptocurrency bill that combines stablecoin regulations with broader rules for digital asset exchanges. The proposal would establish one legal framework governing issuers, trading platforms, investor protection, and market conduct across the country’s digital asset sector.
FSC Chairman Lee Eog-weon presented the plan during a National Assembly Political Affairs Committee meeting on July 29. According to the advance report discussed during the hearing, the regulator will work with the ruling party on one government-backed legislative proposal. However, officials have not confirmed when lawmakers will receive the final draft or how it will be structured.
The legislation represents the second phase of South Korea’s digital asset regulatory framework. Lawmakers introduced the first phase through the Virtual Asset User Protection Act, which took effect in July 2024.
That legislation established safeguards for customer assets, strengthened oversight of abnormal trading, and expanded enforcement against unfair market practices. Moreover, the FSC revealed that authorities have reported or referred more than 30 suspected market abuse cases since the law entered force.
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Unified framework combines stablecoins and exchange rules
South Korea plans to regulate stablecoins and cryptocurrency exchanges through one comprehensive legal framework instead of separate legislation. Consequently, the proposal would establish consistent standards for digital asset businesses while strengthening oversight across the market.
Industry provisions will define digital asset service providers and introduce conduct requirements for regulated companies. Additionally, the bill will create a legal structure governing the issuance and distribution of stablecoins.
User protection measures will also become more comprehensive. Regulators intend to strengthen internal controls and information technology standards while aligning them with requirements already applied across traditional financial institutions.
Besides that, the government plans to tighten anti-money laundering requirements covering stablecoin transactions. Those measures form part of its broader digital asset policy agenda.
South Korea currently has ten cryptocurrency and stablecoin bills pending before the National Assembly. Both the Democratic Party and the People Power Party have submitted separate proposals. Therefore, the government hopes a single bill will reduce regulatory overlap and accelerate the legislative process.
Key provisions still await government approval
Several major policy issues remain unresolved before lawmakers finalize the legislation. Financial regulators, lawmakers, and the Bank of Korea have yet to agree on which entities should issue won-backed stablecoins.
Discussions have included a bank-led consortium where banks would own majority stakes in issuing companies. Nevertheless, the FSC has not formally adopted that model or finalized other major second-phase provisions.
Authorities are also reviewing ownership limits for major cryptocurrency exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. Policymakers have discussed equity caps ranging between 15% and 20%. However, the regulator has not announced its final position.
Meanwhile, officials are reviewing broader corporate participation in South Korea’s cryptocurrency market. Financial institutions have faced ownership restrictions since the country introduced its separation policy in 2017. The FSC intends to coordinate any market-opening measures with the second-phase legislation. As a result, stablecoin rules, exchange ownership limits, and corporate participation could advance through the same legislative process.
Global approaches offer different regulatory models
South Korea’s proposal differs from several existing regulatory frameworks adopted by major financial markets. The United States regulates payment stablecoins through the GENIUS Act, while the European Union includes stablecoins within its broader Markets in Crypto-Assets framework.
Hong Kong operates a dedicated licensing system for fiat-referenced stablecoin issuers under its Stablecoins Ordinance. Likewise, Singapore has adopted separate stablecoin requirements focused on reserve backing and redemption standards. Meanwhile, Abu Dhabi Global Market regulates fiat-referenced token issuance through rules covering reserve assets, capital requirements, disclosures, and redemption rights.
Conclusion
The FSC must still publish its official legislative proposal before formal deliberations begin. Until then, stablecoin issuance rules, exchange ownership limits, and corporate participation remain the central issues shaping South Korea’s unified cryptocurrency framework.
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