Editor's PiCK
"Banking sector calls for allowing interest on won-denominated stablecoins…could it become a variable in legislative debate?"
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Summary
- The banking sector reportedly consolidated an internal position calling for allowing interest payments on won-denominated stablecoins, premised on bank-led issuance.
- The Korea Federation of Banks said it discussed, at a closed-door briefing, a bank-centric single stablecoin issuance model and, based on that, whether to allow interest payments as key agenda items.
- As the ruling party finalizes its plan, the issuer and whether to allow interest payments are expected to be key issues, and it remains uncertain whether allowing interest will be reflected in legislation.
South Korea’s banking sector is said to have internally consolidated a position calling for permission to pay interest, on the premise that banks take the lead in issuing won-denominated stablecoins.
According to industry sources on the 19th, the Korea Federation of Banks reportedly held a closed-door briefing on the 15th for major commercial banks and discussed a joint response strategy on won stablecoins. The key agenda items included a bank-centric single-stablecoin issuance model and, contingent on that framework, whether interest payments should be allowed.
The discussion served as an interim check-in on a research project commissioned by the federation on won stablecoins. The main focus is assessing the validity of bank-led issuance and reviewing overseas and domestic cases, with the final report set to be completed in early next month. With legislation for the Digital Asset Basic Act gaining traction, the move is seen as a strategic effort by banks to exert influence in the early stages of制度 design.
While the government proposal appears to be coalescing around a bank-centered issuance model, differences within the political sphere remain a key variable. Financial authorities have previously shared a plan to allow issuance starting with consortia in which banks hold at least 50%+1 equity. The main opposition party, however, has objected, arguing that a bank-majority structure could limit competition and stifle private-sector innovation.
The ruling party’s proposal is expected to be finalized on the 20th, with the identity of eligible issuers and whether to allow interest payments emerging as key sticking points. In this process, the banking sector’s decision to put the “allow interest” card front and center is interpreted as an attempt to provide incentives to hold stablecoins, capture users early, and defend traditional deposit-taking functions.
Still, it remains unclear whether permission for interest payments will be reflected in actual legislation. Similar currents are seen overseas. In U.S. legislative discussions on stablecoins as well, paying interest or returns to users by issuers is, in principle, being restricted. This is interpreted as an effort to keep stablecoins as neutral infrastructure for payments and the DeFi ecosystem.
