South Korea’s effort to introduce a comprehensive stablecoin framework has stalled due to disagreements between financial authorities over issuer eligibility. The proposed Digital Asset Basic Act would impose strict reserve management, custody, and disclosure requirements on stablecoin issuers to strengthen investor protection.
Under the draft rules, issuers would be required to fully back tokens with bank deposits or government bonds and entrust reserves to qualified custodians. The framework would also extend liability standards to digital asset service providers, holding them responsible for damages from hacks or system failures, regardless of fault.
Progress has slowed as the Bank of Korea and the Financial Services Commission remain divided on whether issuance should be limited to bank-led consortia. The dispute has pushed legislative timelines into next year, prompting lawmakers to explore alternative proposals. The outcome will shape South Korea’s approach to stablecoins as it balances financial stability, innovation, and monetary sovereignty.
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