South Korea Delays Comprehensive Crypto Law Until 2026 Over Stablecoin Dispute
South Korea postpones its Digital Asset Basic Law as regulators remain deadlocked over stablecoin supervision, creating uncertainty for one of Asia's most active crypto markets.
South Korea has officially delayed submission of its Digital Asset Basic Law until 2026, as the Financial Services Commission and Bank of Korea remain deadlocked over stablecoin oversight authority.
What Happened
South Korean regulators have postponed the second phase of the country's comprehensive crypto framework, the Digital Asset Basic Law, until 2026. The delay stems from fundamental disagreements between the Financial Services Commission (FSC) and the Bank of Korea over who should supervise stablecoin reserves and enforcement.
The Bank of Korea has pushed for a model requiring stablecoins to be issued only by bank-led consortia holding at least 51% ownership. The FSC has resisted this approach, warning it could sideline technology firms and slow innovation in digital payments.
Why It Matters
The proposed law would introduce no-fault liability for digital asset operators, meaning exchanges could be held responsible for user losses even without proven negligence. Stablecoin issuers would need to hold 100% reserves in bank deposits or government bonds.
The deadlock creates uncertainty for crypto firms operating in South Korea, one of Asia's most active trading markets. Industry observers note that regulatory hesitation, even when driven by caution, can slow innovation and weaken investor confidence. A 20% capital gains tax on crypto profits has also been delayed to 2027.
What to Watch
The ruling Democratic Party is drafting an alternative consolidated bill that could move forward independently in early 2026. President Lee Jae Myung has prioritized developing a Korean won-backed stablecoin to counter U.S. dollar dominance in global stablecoin markets. The first phase of crypto regulation, enacted in July 2024, focused on cracking down on market manipulation and insider trading.
Key Takeaways
This is a developing story. South Korea's regulatory approach will likely influence how other Asian markets structure digital asset frameworks as the region continues to balance innovation with investor protection.