Won-backed stablecoin legislation to miss September target
Legislation for a won-backed stablecoin is unlikely to be completed within September, the original target date.
Why the Legislation Is Delayed
The government and the National Assembly have been pushing to enact the Digital Asset Basic Act, which would define who can issue won-backed stablecoins and set the regulatory framework. However, according to a Yonhap News report, the Financial Services Commission has been spending time on internal coordination over the final confirmation of the government's review draft, slowing the legislative timetable. As of the 27th, based on movements in the National Assembly and financial authorities, it will take considerable additional time before the government's bill is submitted to the Assembly.
There are two major points of contention: who will be allowed to issue won-backed stablecoins, and at what level safeguards such as reserve management and capital regulation should be set. The banking sector argues that issuers should be limited to financial companies, while the financial investment industry and big tech companies want the door opened more widely. With these competing interests entangled, the confirmation of the review draft is making little headway.
Key Provisions and Scope of the Bill
The Digital Asset Basic Act is a comprehensive piece of legislation that combines virtual asset user protection with a legal basis for stablecoin issuance. A stablecoin is a cryptocurrency pegged to the value of an existing currency, such as the won, to reduce price volatility. Once enacted, the law would create a new regulatory framework covering issuance permits, 100% reserve requirements, and capital adequacy standards.
The scope of the law would tentatively cover banks, financial investment firms, and, under proposals floated so far, non-financial companies that meet certain requirements. However, according to Yonhap, disagreements have grown even within the financial sector over how far to open up the range of eligible issuers, and this has yet to be reflected in the final draft.
Industry Moves Faster Than the Law
What is notable is the market's response. According to Yonhap, large platform companies, including Kakao, are already designing business structures spanning wallets, remittances, payments, and settlement in anticipation of won-backed stablecoins being institutionalized. While the legislation stalls, companies are preparing the technology and business partnerships needed to launch services the moment the regulatory door opens.
This shows that a legislative delay does not necessarily translate into market stagnation. On the contrary, some interpret that the later the regulatory framework is finalized, the fiercer the pre-emptive competition becomes, and the greater the power struggle over who gets chosen as issuers. The banking sector, for its part, is reportedly reviewing related infrastructure in a bid not to lose the lead in issuing won-backed stablecoins.
Outlook and Implications
If the September deadline is missed, the legislative timetable will become tied to the regular National Assembly schedule. With the government's bill delayed, the discussion could also proceed within the relevant Assembly committee in the form of lawmaker-initiated legislation. Both ruling and opposition parties agree on the need to institutionalize digital assets, so the bill itself appears unlikely to collapse, but the timing of its passage will remain highly fluid depending on negotiations over the range of eligible issuers.
From an investment perspective, two things stand out. First is the potential real benefit to financial companies and large platform firms that can directly engage in stablecoin issuance and distribution. Second is that companies already holding payment and settlement infrastructure could seize market share once institutionalization takes place. Since the law's final form could reshape the market landscape, the legislative process itself is expected to serve as a key variable in investment decisions.
