Key Takeaways
- The Bank of Korea wants to limit KRW stablecoin issuance to entities that are at least 51% owned by banks.
- Meanwhile, the Financial Services Commission (FSC) favors more fintech-friendly stablecoin regulation.
- With legislation expected in 2026, influential lawmakers have sided with the FSC.
As South Korea prepares to regulate stablecoins in 2026, one question has come to dominate the policy debate.
Should legislation enshrine a role for banks in law, or should South Korea’s stablecoin market be open to a broader range of fintech players?
The latter position recently got a major boost from the Democratic Party of Korea’s Digital Asset Task Force, which looks set to oppose the central bank’s “51% rule.”
South Korea’s 51% Rule for Stablecoin Issuers
Calls to anchor Won-backed stablecoins in the banking sector have been spearheaded by the Bank of Korea (BoK).
For instance, in July, BoK Governor Rhee Chang-yong cautioned that “If we allow non-banks to issue stablecoins, this will cause major chaos.”
To ensure banks have a controlling stake in the new market, the central bank has drawn up draft proposals for the Digital Asset Basic Act that would require stablecoin issuers to be at least 51% owned by licensed banks.
Any such provision would ensure that banking consortia effectively control South Korea’s stablecoin supply, while fintechs would be relegated to the sidelines, only ever able to play a supporting role.
However, as Digital Asset Basic Act negotiations enter the final stretch, powerful forces within the National Assembly are opposed to the 51% rule.
Digital Asset Task Force Opposes Stablecoin Restrictions
Opponents of the BoK’s proposal argue that limiting fintech involvement risks stifling innovation and would bring South Korea out of line with emerging global standards.
For instance, the Financial Services Commission (FSC) is reportedly preparing an alternative legislative draft that doesn’t include the 51% rule.
And there are signs that it has the support of National Assembly lawmakers.
According to Ahn Do-geol, who leads the Digital Asset Task Force, a majority of the 20 experts on the group’s advisory committee expressed concerns about the BoK’s proposal.
“They argue that this governance structure could make it difficult to achieve the innovation and network effects that stablecoins are intended to achieve,” he observed, per local media reports.
“Issuers should be selected based on their ability to advance innovation rather than their institutional classification,” the lawmaker added.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
