South Korea's Stablecoin Showdown: Parties Clash Over Crypto Interest
- Keyword Financial
- Jul 28
- 4 min read
Introduction
South Korea’s two largest political parties have both introduced competing bills aimed at regulating stablecoins, reflecting the country’s push to become a leader in digital asset regulation. The Democratic Party’s proposal, led by Ahn Do-geol, focuses on establishing a comprehensive framework that requires stablecoin issuers to hold at least 5 billion won in capital and emphasizes inter-agency coordination for monetary and foreign exchange oversight. Meanwhile, the People Power Party’s bill, spearheaded by Kim Eun-hye, allows for interest payments on stablecoins and mandates detailed disclosure requirements, such as whitepapers and product descriptions. Both bills require pre-authorization from the Financial Services Commission, but they diverge on the issue of whether stablecoin holders should receive interest, which has become a key point of contention between the parties.
The legislative race is part of a broader effort to balance innovation and consumer protection in South Korea’s rapidly evolving fintech sector. While Ahn’s bill prioritizes monetary governance and regulatory oversight, Kim’s proposal is more focused on incentivizing market innovation by permitting interest payments. This competition between the parties is accelerating the development of a comprehensive digital asset regulatory framework, with the goal of positioning South Korea as a regional leader in fintech and digital currency adoption. Previous legislative efforts, such as the Digital Asset Basic Act introduced by Min Byung-duk, have also contributed to the ongoing debate by proposing lower capital requirements and the establishment of a presidential Digital Asset Committee.
The outcome of this legislative clash will have significant implications for the future of stablecoins in South Korea, particularly regarding how they are issued, managed, and whether holders can earn interest. As the country’s parliament moves closer to enacting new regulations, the focus remains on finding a balance between fostering innovation in the digital asset space and ensuring robust consumer protections. The debate highlights the complexities of integrating stablecoins into the broader financial system and underscores South Korea’s ambition to set a regulatory example for other countries in the region.
