South Korea eyes bank-majority rule for won stablecoins

South Korea's proposed digital asset bill would require consortiums with a bank majority to issue won-denominated stablecoins domestically, according to a framework now circulating in Seoul. Banks would hold at least 50% plus one share of any authorized issuer, while crypto exchanges and tech firms could handle distribution, customer transactions and merchant settlement. The Financial Services Commission is expected to unveil the main provisions of the Digital Asset Basic Act in November after consulting other agencies.

Lawmakers are still split on the bank-majority requirement, South Korean outlet ZDNet Korea reported on November 12. The legislation has been held up by disagreements over who qualifies as an issuer, ownership limits on crypto exchanges and consumer protection rules. The Bank of Korea has backed a bank-centered model, warning that privately issued stablecoins could spread through payments and ripple into financial markets, though the FSC has said the ownership requirements for issuers are not finalized.

Fintech companies are pushing back. At a November 12 National Assembly forum on won stablecoin infrastructure, VIDEX CEO Ryu Hong-ryeol told lawmakers that licensing should hinge on financial safeguards and operational capability, not on being a bank. “Licensing standards should be established based on business capabilities and risk management systems rather than limiting issuers to banks,” he said, arguing that banks and tech firms are “in a mutually complementary relationship, not a replacement.” Ryu proposed letting banks manage reserves and liquidity while technology companies run blockchain operations, private keys and payments.

The rules would land squarely on the planned tie-up between Dunamu, which runs Upbit, and Naver Financial, under which Naver Financial would acquire Dunamu through a share exchange. On November 10, the Fair Trade Commission opened formal deliberations after flagging 10 affected markets, including crypto exchanges, online payments and the future won stablecoin market. Regulators are weighing whether bundling issuance, trading and merchant payments would make it harder for rivals to win customers. The companies have submitted proposed corrective measures and are still waiting on final approval.

Beyond who gets to issue, lawmakers are weighing how customer money is protected. A financial regulatory representative said stablecoin services used for electronic payments may need to comply with South Korea's Electronic Financial Transactions Act, covering customer funds held for payments, settlement balances, transaction records and dispute resolution. Participants at the November 12 forum also raised wallet custody, key management, multisignature security and auditing, while legal experts asked for clearer rules on payments, settlement and public-versus-private blockchain transactions.