Korea mulls legislating its first law on stablecoins

(Reuters/Yonhap)

South Korea is seeking to introduce a law focused on stablecoins for the first time.

The move comes amid the rapid global expansion of U.S. dollar-based stablecoins following the inauguration of U.S. President Donald Trump.

According to political sources on Sunday, Representative Kim Eun-hye of the main opposition People Power Party is expected to propose a bill related to the issuance of won-based stablecoins this week.

While the Digital Asset Basic Act proposed by Representative Min Byoung-dug of the ruling Democratic Party includes some provisions related to stablecoins, this is the first bill dedicated entirely to them.

Kim’s bill defines stablecoins as “value-pegged digital assets” and establishes rules for issuers, regulatory frameworks, and user protection.

To issue stablecoins, the bill requires that domestic companies either be a joint-stock company, a financial institution designated by presidential decree, or have a minimum of 5 billion won ($3.62 million) in capital, while foreign companies must establish a local office in Korea.

Furthermore, the bill stipulates that stablecoin issuance must receive approval from the Financial Services Commission (FSC) and that mergers, splits, dissolutions, or business transfers involving stablecoins must also receive FSC approval to protect users.

It also enables the Bank of Korea to request data from stablecoin issuers and ask the Financial Supervisory Service to conduct relevant inspections.