South Korea Delays Stablecoin Rules in Bank-Regulator Clash

South Korea's anticipated regulatory framework for stablecoin issuance faces significant delays, potentially extending into next year, as the central Bank of Korea clashes with financial regulators over the extent of banks' involvement in the sector. The dispute, centered in Seoul, centers on whether banks should hold majority stakes in issuers of won-pegged stablecoins, leaving lawmakers and industry players in a state of uncertainty.

Stablecoins are digital assets designed to maintain a stable value, typically pegged to fiat currencies like the Korean won or the U.S. dollar, or to assets such as gold. Popular examples include Tether and USD Coin, both tied one-to-one to the dollar. In South Korea, the framework was originally slated for introduction by late 2025 as part of the second phase of the Virtual Asset User Protection Act, which took effect in July 2024. However, recent National Assembly discussions have stalled, with proposed bills removed from agendas amid unresolved differences.

At the heart of the disagreement is the Bank of Korea's insistence that a consortium of banks must own at least 51 percent of any stablecoin issuer to secure approval. Bank officials argue...