Korea to Designate Major Won-Pegged Stablecoins for Tighter Oversight

The Korean government has decided to designate won-pegged stablecoins exceeding a certain issuance threshold as "significant coins" and implement differentiated regulations.

According to financial industry sources on Wednesday, the Democratic Party of Korea's Digital Asset Task Force held a closed-door meeting at the National Assembly and received a briefing from the Financial Services Commission (FSC) on a draft government proposal for the second phase of virtual asset legislation.

The FSC's final bill has not yet been officially submitted to the National Assembly as disagreements with the Bank of Korea (BOK) remain unresolved.

The FSC reported a plan to separately designate significant stablecoins based on the number of users and issuance volume. Significant stablecoins would be designated through consultation with the BOK, partially reflecting the central bank's concerns over won-pegged stablecoin issuance.

"This benchmarks the European Union's Markets in Crypto-Assets (MiCA) regulation," a Democratic Party TF official said. "It reflects the Bank of Korea's concerns about stablecoins' impact on monetary policy, and is closer to a data submission requirement rather than a control authority."

The legal name for won-pegged stablecoins will be tentatively set as "digital payment tokens." However, this is not a finalized term but a provisional name used during internal review and may change through future discussions, the official explained.

For foreign-issued stablecoins such as Tether (USDT) and USD Coin (USDC), the FSC proposed requiring domestic branches for distribution in Korea.

The FSC reportedly plans to report the government proposal to the Presidential Office on January 19 after coordinating remaining issues including issuance entities and supervisory authority. Once the government proposal is finalized, the Democratic Party will hold a second meeting with private advisors on January 22 to review details.

"From the second meeting, advisors will directly review the government proposal, followed by several rounds of TF discussions," a Democratic Party TF advisor said.

The Democratic Party aims to complete opinion coordination within this month based on the government proposal and introduce legislation in January next year.

"The lawmaker-initiated bill is already fully prepared, and once the government proposal is submitted, we will proceed with a combined review at the National Policy Committee level," said Rep. Lee Jung-moon, chair of the Digital Asset TF.

The second phase of virtual asset legislation containing the won-pegged stablecoin regulatory framework has been delayed due to disagreements within the BOK and the government-ruling party coalition over requirements for bank-led consortium issuance and unanimous consent requirements for policy coordination bodies.

The BOK has maintained that issuance should only be permitted to consortiums where commercial banks hold more than 51% stake. In contrast, the FSC and ruling party believe non-bank entities such as fintech companies should be able to participate as lead issuers.

"It seems the National Assembly now needs to reach a conclusion," said Rep. Kang Jun-hyun, the ruling party's chief coordinator on the National Policy Committee. "Opinion coordination should be completed within December, and after introduction in January, the review process must proceed."