South Korea Delays Stablecoin Regulation Until 2026

TLDR

• Regulations pushed back from December 2025 to 2026.
• FSC and BOK disagree on stablecoin management approaches.
• Regulatory delay creates uncertainty in the crypto market.

South Korea’s efforts to set stablecoin regulations have come to a halt. The delay is rooted in disagreements between the Financial Services Commission (FSC) and the Bank of Korea (BOK). The plan to have regulations in place by December 2025 has now been pushed back into 2026.

The primary issue involves differing approaches to financial stability and innovation. The FSC wants to prevent bank dominance in the stablecoin sector, while the BOK insists on treating stablecoins like traditional currency under strict bank control.

Regulatory Clash Over Stablecoin Management

The Digital Asset Basic Act was intended to introduce comprehensive rules governing stablecoins. It emphasized regulation to ensure stability but also aimed to foster innovation within the fintech industry. However, the FSC and BOK’s divergent views on the regulatory framework have delayed the Act’s implementation.

The disagreement largely centers on the BOK’s proposed 51% rule, which advocates a majority bank ownership for stablecoin issuers. The FSC argues that this would hinder competition from non-bank entities, impacting innovation in the financial technology sector.

Financial Stability vs. Fintech Innovation

Financial stability remains BOK’s priority. They argue for treating stablecoins as currency-equivalent assets, enforcing strict controls to mitigate risks. The BOK’s stance includes holding reserves exceeding 100% in banks or securities.

FSC’s approach leans towards promoting fintech innovation. They emphasize resisting complete bank dominance, which could suppress competition and stifle advancements by startups and non-bank players.

Implications for the Crypto Market

The delay in regulation has created a climate of uncertainty in the crypto market. This uncertainty is viewed as a potential deterrent to foreign investment, although no financial impacts or market reactions have been quantitatively recorded.

Stablecoins, DeFi platforms, exchanges, and payment providers are broadly impacted by the regulatory delay. While specific cryptocurrencies like Ethereum or Bitcoin remain unaffected, the broader cryptocurrency ecosystem anticipates the clarification of regulations.

Looking Ahead: Awaiting Regulatory Clarity

The resolution of these regulatory clashes is awaited keenly by market participants. By establishing a clear path forward, South Korea could enhance its fintech industry’s growth while maintaining financial stability.

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