South Korea Delays Digital Asset Basic Law to 2026 Amid Stablecoin Regulatory Dispute

Source: Cryptonews Original Title: Korea’s digital asset law delayed to 2026 amid stablecoin power struggle Original Link: https://crypto.news/koreas-digital-asset-law-delayed-to-2026-amid-stablecoin-power-struggle/ South Korea has postponed its Digital Asset Basic Law until 2026 as regulators remain divided over stablecoin oversight authority.

Lawmakers paused the crypto legislation as the Financial Services Commission and the Bank of Korea continue to clash over control of stablecoin reserves and enforcement responsibilities, creating regulatory uncertainty in one of Asia’s largest cryptocurrency markets.

Framework and Key Provisions

The Digital Asset Basic Law is designed to serve as the foundation of South Korea’s cryptocurrency regulatory framework. The legislation aims to strengthen investor protection by imposing stricter legal standards on digital asset operators.

A key provision would introduce no-fault liability, making operators responsible for user losses even without proven negligence. The draft also requires stablecoin issuers to maintain reserves exceeding 100 percent of circulating supply, held at banks or approved institutions and separated from the issuer’s balance sheet to limit contagion risks.

Core Disagreements

Stablecoin oversight has emerged as the primary point of contention between regulators. While authorities broadly agree on the need for stronger supervision, they have not reached consensus on the division of responsibilities for reserve rule enforcement and licensing authority. The disagreements have complicated decisions around enforcement powers and the treatment of reserve assets, prompting authorities to delay the bill rather than advance legislation with unresolved structural issues.

Impact on Industry

The postponement adds uncertainty for cryptocurrency firms operating in South Korea, including exchanges, payment providers, and stablecoin issuers. The absence of a completed regulatory framework may affect product launches, investment decisions, and operational planning.

Government Priorities

The ruling Democratic Party is working to consolidate several lawmaker proposals into a revised digital asset bill. The government has identified a Korean won-backed stablecoin as a national priority, arguing it could counter the dominance of US dollar-linked stablecoins in global cryptocurrency markets.

The delayed Digital Asset Basic Law represents the second phase of South Korea’s cryptocurrency regulation. The first phase, currently in force, addressed unfair trading practices in the digital asset sector.