Korea's blockchain industry is being shaken as enactment of the Digital Asset Basic Act, which would regulate stablecoins, continues to be delayed. Critics say the regulatory vacuum is pushing some startups to the brink of survival, with companies unable to launch businesses despite completing technology development.
BPMG, which has been developing stablecoin payment and remittance infrastructure with internet bank K-Bank and Thailand's Kasikorn Bank, has completed its technology development but cannot begin actual operations due to the legislative delay, according to financial industry sources on Thursday. The company initially deployed about 20 developers based on expectations of legislation passing in the first half of the year, but is now generating no revenue while continuing to pay salaries, with cost burdens estimated to have increased 20-30%.
Such cases are spreading across the industry. One blockchain company that had secured investments worth tens of billions of won from a major conglomerate is reportedly in discussions over liquidation procedures due to financial difficulties. Projects being pursued with major financial institutions are also being scaled back. Blockchain company A had been discussing a joint venture with a financial institution since late last year, but the project scope was reportedly reduced after the financial institution slowed its pace due to the delayed legislation. "For startups, simply surviving costs money," an industry official said. "The longer the timeline extends, the more we have to consider abandoning our business."
The problem is that such delays do not simply end with individual companies' difficulties. The blockchain industry comprises not only exchanges but various infrastructure companies spanning data analytics, institutional services, staking, security, custody, wallets, payments, and decentralized finance. While exchanges can sustain themselves to some extent through fee-based revenue, infrastructure companies are taking a direct hit from regulatory delays as they incur development costs without generating revenue, analysts say. Market observers note that "if the legislation is pushed to next year, virtually the entire industry could be affected except for Upbit and Bithumb."
Wallet providers, considered core blockchain infrastructure, are also withdrawing in succession. LG Electronics' Wallypto, Line's Dosi Vault, and Rotonda's Burrito Wallet have all discontinued services, weakening the ecosystem's foundation. "Global markets have already moved to commercialization of blockchain services like stablecoins and real-world assets (RWA), but Korea hasn't even established a basic legal framework," industry officials say. "At this rate, domestic blockchain infrastructure could lose its competitiveness."
As industry momentum weakens, legislative discussions remain stalled on key issues. In particular, the debate has centered on restrictions on exchange shareholders' equity stakes, leaving broader regulatory design as a secondary priority. The National Assembly's Political Affairs Committee plans to resume discussions at a subcommittee meeting on the 15th, but the timing of passage remains unclear due to financial market volatility and political schedules.
Experts emphasize that swift legislation is needed, noting that the Digital Asset Basic Act is not simply an industry promotion law but a core piece of legislation that will shape the digital financial order. "This law designs a market structure encompassing issuance, distribution, settlement, and custody. Major countries are simultaneously pursuing stablecoin regulation and market structure reform," said Shin Chang-sun, vice president of Open Asset. "Detailed issues can be addressed through enforcement decrees and supervisory regulations, but the bill itself needs to be prepared quickly."
Some suggest a phased approach through regulatory sandboxes if legislative delays continue. "We need to pursue pilot projects for won-denominated stablecoins using the innovative finance regulatory sandbox," Shin said. A financial industry official also pointed out that "domestic companies are losing opportunities to gain first-mover advantage over foreign competitors" and that "the longer the policy vacuum continues, the wider the gap will grow."