Anyone Can Issue Stablecoins with Only ₩1 Billion in Capital... Ruling Party Proposes Allowance

Minimum Capital for Electronic Financial Business: ₩5 Billion

Equity Issues Compared to Existing Systems Raise Concerns

Happy Money, Which Defaulted, Had ₩2.5 Billion in Capital

Criticism: "The hurdle is set too low"

The ruling Democratic Party of Korea is pushing for a bill that would allow anyone with over ₩1 billion in equity capital to issue stablecoins. It is evaluated that this move reflects market expectations that stablecoins based on the Korean won will be permitted since the inauguration of the Lee Jae-myung administration. However, there are concerns that excessively lowering the minimum qualification threshold could lead to a proliferation of issuers.

According to the political circles on the 24th, the Democratic Party plans to introduce a digital asset innovation bill next month that stipulates the capitalization requirement for stablecoin issuers as “at least ₩1 billion in equity capital.” Kang Jun-hyun, a Democratic Party lawmaker and ruling party secretary of the National Assembly's Political Affairs Committee, will spearhead the bill.

The core of the Digital Asset Innovation Act is that it defines "value-stabilized digital assets," including stablecoins, and sets the capitalization threshold for digital asset issuers at “over ₩1 billion.” This is a separate bill from the “Digital Asset Basic Act” previously proposed by Democratic Party lawmaker Min Byung-deok.

Although the capital requirement in the Democratic Party’s digital asset innovation bill is double that of Rep. Min’s proposed bill (₩500 million), many argue that the equity standard is still set too low. For example, the capital of Happy Money Inc., the issuer of Happy Money Gift Certificate, which defaulted due to the large-scale unsettled transactions involving Tmon and Wemakeprice, was ₩2.5 billion.

Even considering fairness with the existing framework, the regulation is seen as lax. According to the Electronic Financial Transactions Act, the minimum capital for electronic financial businesses is ₩5 billion. In the case of prepaid businesses, it is ₩2 billion. Only for simple deposit or payment services is ₩300 million ~ ₩1 billion in capital required.

Industry voices argue that given the characteristics of stablecoins that could attract large deposits after issuance, the capital requirement should at least match the level of electronic financial businesses. There are also suggestions that internal controls, accounting oversight, and separate management of reserves should be ensured. An industry insider emphasized, "Even if the industry is nurtured, a minimum level of regulation is needed."

A Financial Services Commission (FSC) official stated, "The capitalization standard needs to be further reviewed," and added, "Additional discussions about capital requirements and consumer protection measures will take place in the National Assembly."

Jo Mi-hyeon, Reporter mwise@hankyung.com