South Korea Urged to Fast-Track Stablecoin Rules Before Crypto Law Is Finalized

South Korea is being encouraged to introduce temporary rules for stablecoin issuers instead of waiting for its broader cryptocurrency legislation to be completed, as industry experts warn that regulatory uncertainty could slow innovation.

A policy report released on Wednesday by Hashed Open Research in collaboration with the Solana Policy Institute calls on regulators to adopt a phased approach to stablecoin oversight. The recommendations include interim licensing guidance, greater operational flexibility for issuers, and early implementation of stablecoin-specific rules before the country's proposed Digital Asset Basic Act becomes law.

The report reflects discussions from a symposium held on June 23, where lawmakers, legal professionals and digital asset industry representatives examined the future of crypto regulation in South Korea.

The Digital Asset Basic Act is expected to become the country's first comprehensive legal framework for cryptocurrencies. The proposed legislation would establish rules covering stablecoin issuance, disclosure requirements, digital asset listings and broader market oversight.

However, progress has been slower than expected as lawmakers continue debating several competing versions of the bill. One of the biggest sticking points remains the structure for stablecoin issuance, with policymakers yet to agree on how much control banks and non-bank companies should have.

According to Democratic Party lawmaker Ahn Dogeol, officials are exploring a middle-ground solution that would allow banks to maintain majority ownership of stablecoin projects while permitting fintech companies and other non-bank businesses to oversee day-to-day operations.

Legal experts also highlighted the need for greater regulatory clarity before the full legislation is enacted.

Kim Hyobong, a partner at law firm Bae, Kim & Lee, argued that authorities should clearly define which digital asset activities financial institutions are allowed to participate in. He also stressed the importance of removing uncertainty around licensing requirements for stablecoin payment services and establishing rules for foreign-issued stablecoins entering the South Korean market.

The report further recommends that South Korea take inspiration from the European Union's rollout of its Markets in Crypto-Assets (MiCA) framework. Rather than waiting for the entire Digital Asset Basic Act to be finalized, regulators could introduce stablecoin issuance requirements first, giving businesses a clearer regulatory path while broader legislation continues moving through the legislative process.

Supporters of the phased approach believe it would provide the crypto industry with greater certainty, encourage responsible innovation, and help South Korea remain competitive as jurisdictions around the world continue developing digital asset regulations.