Key Summary
- A Financial Supervisory Service official said stablecoins used as electronic payment tools should be subject to the Electronic Financial Transactions Act.
- The official argued that applying different laws to different payment methods in the same transaction could create regulatory distortions and confusion.
- Central bank and industry participants discussed licensing, anti-money-laundering duties, consumer protection, and the role of banks and technology firms in stablecoin issuance.
- Participants said the government’s draft Digital Asset Basic Act is expected within this month.
Main Story
South Korean policymakers, regulators, and industry representatives discussed stablecoin rules at a forum in Seoul on the 10th, focusing on how the digital assets should fit into the country’s existing payments framework.
At the event, an official from the Financial Supervisory Service said that if stablecoins are used as a means of electronic payment, applying the Electronic Financial Transactions Act would be unavoidable in order to address fairness with existing payment instruments, protect users, and maintain settlement stability. The official added that if different legal regimes apply to different payment tools within a single payment transaction, the result could be confusion and regulatory arbitrage.
The same official said stablecoins could have a significant impact on the payments market because they can improve the finality of real-time settlement, increase the usefulness of data, and facilitate cross-border transactions. He also said rules under the electronic financial law should include a small-scale license for stablecoin payment businesses, requirements for stability, terms and conditions filing and reporting, protection for preloaded funds and settlement funds, protection of transaction data, and dispute handling obligations. He further said that anti-money-laundering duties should apply separately to issuers, wallet providers, and payment businesses.
A Bank of Korea official also raised questions about how much the country should rely on a global private network for a national payment system. The official said it is also necessary to consider how stablecoins should connect with existing systems, how interoperability should be designed, and how the institutional framework should be built. The central bank official reiterated the view that issuance should start with banks and expand to other eligible issuers only after it is confirmed that the technology can work well with existing systems and regulation. That approach was described as a compromise intended to reduce the risk that stablecoins could be used to bypass regulation.
According to the discussion, the government draft of the Digital Asset Basic Act, which is expected later this month, is anticipated to center stablecoin issuance around a bank-led consortium. Until now, opinions have differed between those who want bank-centered issuance for stability and those who want more participation from fintech and other technology firms to expand innovation.
Other speakers offered different perspectives on the structure of issuance. One professor from Dongguk University said a model that allows participation by businesses meeting defined qualification and responsibility standards would be preferable to a system centered on a single industry. The chairman of the Credit Finance Association said he hoped a won-based stablecoin consortium would allow a range of financial sectors to contribute according to their strengths, and that card companies could help reflect merchant and user experience from the outset if they are given a chance to participate. A Shinhan Card executive on the panel said many overseas stablecoin payment cases use the Visa network, and that early stablecoins may also need to use card networks to circulate effectively in payments.
Lawmakers from the Democratic Party’s AI finance and economy task force, including Park Min-kyu, Lee Kang-il, and Ahn Do-geol, said they expect the government draft to be released this month and stressed that follow-up legislative work should continue.
Background
The forum in Seoul was jointly hosted by the Democratic Party’s AI Finance and Economy Task Force and organized by the Credit Finance Association and the Korea Fintech Industry Association. No additional background was provided in the supplied text beyond the ongoing debate over how stablecoin issuance should be structured in relation to the forthcoming Digital Asset Basic Act.
Items Requiring Further Verification
- The government draft of the Digital Asset Basic Act is expected to be released within this month; this is a forecast rather than a confirmed publication date.
- The text says the draft is expected to place stablecoin issuance under a bank-led consortium; this appears to be an expectation, not a confirmed policy decision.
- Statements about the likely market effects of stablecoins, the need for specific licensing rules, and the preferred issuance structure are attributed opinions and policy views, not established facts.
- The report refers to several participants’ views on card-network usage and broader issuer eligibility; these are proposals and interpretations that would need independent confirmation before being treated as policy outcomes.