Member An Do-geol pushes legislation for the introduction of a KRW-based stablecoin

Member An Do-geol of the Democratic Party of Korea announced on the 12th that, in connection with the 'Digital Asset Basic Act' proposed by Member Min Byung-deok on the 10th, he would pursue the enactment of the 'Act on the Issuance and Operation of Digital Payment Instruments (KRW-based Stablecoin)' to additionally supplement the currency function and uniqueness of stablecoins.

This bill is interpreted as a legislative effort to prevent Korea from lagging behind in the global digital financial industry if it misses the golden time to establish a foundation for digital payment instruments, as stablecoins are expanding their competitiveness in the global digital financial market.

The need for introducing a KRW-based stablecoin system can be summarized in the following five points.

△ (Securing digital payment instruments) Securing KRW-based digital payment instruments in line with the trend of rapidly expanding digital transactions and the global economy's transition toward digitalization

△ (Securing monetary sovereignty) Proactively responding to concerns about the loss of monetary sovereignty—such as the replacement of the KRW's role or undermining the effectiveness of domestic monetary policy—if dollar-based stablecoins, which account for 98% of the global stablecoin market, expand in domestic use

△ (Opportunity for KRW internationalization) Through the international acceptance of KRW-based stablecoins, expanding the KRW's internationalization and global economic influence is expected

△ (Building next-generation financial infrastructure) Well-designed KRW-based stablecoins can promote cost reduction in payment and settlement, real-time interbank settlement, and the efficiency of domestic financial infrastructure, and, by sharing roles with CBDC (Central Bank Digital Currency), serve as core infrastructure for the future financial system

△ (Innovation in fintech and the financial industry) The introduction of stablecoins is expected to enhance payment and remittance efficiency, and create various fintech and derivative financial services industries utilizing smart contract functions

The bill promoted by Member An Do-geol is set to comprehensively include key aspects such as the qualifications for stablecoin issuers, licensing requirements, requirements for collateral assets, management measures from a currency management perspective, foreign exchange control, measures for building a sound stablecoin ecosystem, and safeguards for user protection.

△ (Issuer qualification and licensing requirements) Regulations for capital requirements, qualifications, and licensing procedures for entities allowed to issue KRW-based stablecoins △ Collateral assets composed of high-liquidity assets (such as KRW deposits or government bonds), △ Collateral asset holdings of not less than 100% of the issued amount, △ (User protection) Transparent disclosure of issuance and circulation information, △ User protection provisions equivalent to those in the capital markets, △ Stipulation of payment guarantees or loss compensation for stablecoin holdings, △ Measures enabling the authorities to restrict issuance and circulation to protect users in case of significant risk situations △ (Management system and governance) Establishing tailored policy management and operational systems in consideration of effects on money supply and foreign exchange balance △ Establishment of policy management bodies through close cooperation between MOEF (foreign exchange authority), Bank of Korea (monetary authority), and FSC (financial authority), △ Division of roles such as issuance authorization, regulation of issuance and circulation scale, based on institutional expertise △ (Regulation on foreign exchange transactions) Ensuring smooth capital inflows and outflows, △ Promoting exchange rate stability, △ Guaranteeing monetary sovereignty, △ Establishing a rational management system for international remittance and receipt of stablecoins, considering harmonization with international standards

Member An Do-geol stated, "If this bill is enacted, it will institutionally support the transition to a digital economy, secure monetary sovereignty for the KRW, and serve as a catalyst to significantly enhance the international competitiveness of the domestic digital asset platform industry."