Catenaa, Sunday, August 03, 2025- South Korea’s two major political parties have introduced competing stablecoin bills that agree on regulation but clash sharply over allowing interest payments on stablecoins, spotlighting a key regulatory debate.
The ruling Democratic Party (DP) and opposition People Power Party (PPP) both unveiled draft laws on July 28 targeting won-pegged stablecoins, aiming to regulate their issuance and distribution under the Financial Services Commission (FSC).
Both bills would designate the FSC as the sole licensing authority, requiring issuers to be regulated financial institutions with a minimum equity capital of 5 billion won ($3.6 million) and dedicated IT teams. Overseas companies would need local branches to qualify.
Where the bills diverge is on interest payments.
The DP’s bill, authored by An Do-geol, seeks to ban interest-paying stablecoins, citing risks of monetary disruption and financial instability. Conversely, the PPP’s Kim Eun-hye argues that allowing interest payments would boost competitiveness and foster growth of won stablecoins internationally.
The divide echoes industry uncertainty, with experts noting that interest payments could classify tokens as securities under laws like those in the U.S., complicating regulatory frameworks.
South Korea’s legislative push follows U.S. regulatory changes such as the GENIUS Act, which prioritizes stablecoin holders in bankruptcy claims, driving East Asian regulators to accelerate stablecoin frameworks.
Local giants including Kakao, Naver, and Lotte Card are poised to engage as the country formalizes its regulatory stance.
The outcome will shape South Korea’s role in the global stablecoin landscape and influence broader digital asset policy across the region.
