"Financial Services Commission and Bank of Korea Begin Discussions on Won-Denominated Stablecoins… Key Issues Remain Disputed"

The Financial Services Commission is reported to have started formal consultations with the Bank of Korea while pushing for 'second-phase virtual asset legislation' that includes policy directions for won-denominated stablecoins. However, differences remain large over issuance structures and supervisory authority, so it is expected to take more time before legislation is enacted.

On the 20th, industry sources said Vice Chairman Kwon Dae-young of the Financial Services Commission recently met with Bank of Korea officials in charge of digital assets to discuss a draft of the second-phase legislation that includes rules related to stablecoins. The FSC is supplementing detailed provisions with the goal of submitting them to the National Assembly this month, but considering the deadline for the regular National Assembly session (Dec. 9), the schedule is tight.

The core issues are the issuing entities and the definition of issuers' roles. The FSC and the National Assembly are leaning toward allowing stablecoin issuance not only by banks but also by non-bank sectors such as fintech. Measures under consideration include raising the minimum capital requirement for issuers from 500 million won to 5 billion won to ensure supervision and soundness.

The Bank of Korea, on the other hand, holds the view that stablecoins should be issued by institutions subject to strict regulation, like banks. The Bank has expressed strong concerns that non-bank issuance could increase difficulties in supervision and management.

Who will be responsible for issuance licensing and supervisory authority is also an issue. The FSC insists that, as the main financial policy ministry, it should hold licensing and supervisory authority, but the Bank of Korea is said to be seeking involvement from the licensing stage, arguing that substantive central bank involvement is necessary from the perspectives of monetary policy and financial stability.