South Korea is delaying its Digital Assets Basic Law until 2026 as regulators clash over stablecoin reserves, enforcement powers and investor protection rules.
Summary
- South Korea has postponed its Digital Asset Basic Law until 2026 as the FSC and Bank of Korea remain divided over the supervision of stablecoin reserves and licensing powers.
- The draft introduces no-fault liability for operators and more than 100% reserve backing for stablecoins held in segregated bank or custodial accounts.
- The delay extends regulatory uncertainty for exchanges, payment companies and issuers as the ruling party consolidates proposals and implements a firm stablecoin agenda.
South Korea has postponed the Digital Assets Basic Law until 2026 as regulators remain divided over stablecoin regulatory authority, according to legislative sources.
Lawmakers have paused crypto legislation as the Financial Services Commission and the Bank of Korea continue to clash over control of stablecoin reserves and enforcement responsibilities, creating regulatory uncertainty in one of Asia’s largest cryptocurrency markets.
The Digital Asset Basic Law is designed to serve as the basis for South Korea’s cryptocurrency regulatory framework. The legislation aims to strengthen investor protection by imposing stricter regulatory standards on digital asset operators, the bill said.
A key provision would introduce no-fault liability, making operators liable for user losses even without proven negligence. The draft also requires stablecoin issuers to maintain reserves greater than 100 percent of the circulating supply, held at banks or approved institutions and segregated from the issuer’s balance sheet to limit contagion risks.
Stablecoin supervision has become the main point of contention among regulators. While authorities broadly agree on the need for stronger supervision, they have not reached consensus on the division of responsibilities for enforcing reserve rules and the licensing authority.
The disagreements have resulted in complicated decisions on enforcement powers and the handling of reserve funds, leading authorities to delay the draft law rather than advancing legislation with unresolved structural problems.
The postponement creates uncertainty for cryptocurrency companies operating in South Korea, including exchanges, payment providers and stablecoin issuers. The lack of a complete regulatory framework could impact product launches, investment decisions and operational planning, industry observers noted.
The ruling Democratic Party is working to consolidate several proposals from lawmakers into a revised digital assets law. President Lee Jae Myung has identified a Korean won-backed stablecoin as a national priority, arguing it could counter the dominance of US dollar-pegged stablecoins in global cryptocurrency markets, according to statements from the presidential office.
The Delayed Digital Asset Basic Law represents the second phase of South Korea’s cryptocurrency regulation. The first phase, currently in force, concerns unfair trade practices in the digital assets sector.
