DP task force, FSC agree to broaden eligible stablecoin issuers…potential participation by central and local governments and fintechs

The Democratic Party’s (DP) Digital Assets Task Force (TF) and the Financial Services Commission (FSC) have agreed to expand the range of entities eligible to issue stablecoins—now a key issue in the second phase of digital-asset legislation—beyond the existing bank-centered structure.

According to industry sources on the 9th, the DP TF and the FSC recently agreed in consultations not to limit stablecoin issuers to banks, but to include the central government, local governments, and public institutions as well. It was also reported that plans to establish an institutional basis that would allow fintech companies to take a leading role in issuance have been placed under review.

Until now, the FSC has been considering a bank-centered framework for stablecoin issuance, reflecting the views of the Bank of Korea. Specifically, an option has been floated that would require banks to secure a “50%+1 share” stake in the issuance consortium. The rationale is that stablecoins could effectively function as private money, necessitating consideration of financial stability and risks to the payments and settlement system.

The DP TF and the digital-asset industry, by contrast, have argued that entrenching a bank-centered structure could curb innovation by limiting fintech participation. They have also pointed to the fact that the leading global stablecoins—Tether (USDT) and USDC—are both issued by fintech companies as support for this view.

Previously, the DP TF reported to the party’s Policy Committee a bill that excluded the banks’ “50%+1 share” rule. However, the committee was said to have leaned toward reflecting the FSC’s position, exposing differing views within the party.

It is interpreted that a compromise to broaden eligible issuers was discussed as the TF proceeded with additional consultations with the FSC. The proposal, however, has not been finalized, and there remains a possibility it could be revised again in future party-government consultations.

Meanwhile, the DP and the FSC had planned to hold closed-door party-government consultations at the National Assembly Members’ Office Building on the 5th to discuss the second-phase digital-asset bill, but the schedule was postponed as financial-market volatility increased amid worsening Middle East tensions. A new date has yet to be set.