South Korea Faces Urgent Stablecoin Legislation as U.S. Advances Rules

Forum Convened on U.S. Stablecoin Regulation and Korean Legislative Response

On April 17, lawmakers Min Byung-deok, Park Min-gyu, and Shin Jang-shik held a forum titled “U.S. Stablecoin Regulatory Framework and Korean Digital Asset Legislation Issues” at the National Assembly Member Building in Yeouido-dong, Yeongdeungpo-gu, Seoul. Participants included Han Seo-hee (attorney, Kwangjang Law Firm), Kim Jong-seung (MRI CEO), Nicky Ariyadsinghe (Chainlink Labs VP), Park Hyuk-jae (Base East Asia lead), Lee Jong-seop (Seoul National University professor), and other lawmakers and industry experts. The forum examined South Korea’s legislative challenges in responding to advancing U.S. stablecoin rules.

U.S. Stablecoin Regulation and Timeline Pressure

Han Seo-hee stated that “the GENIUS Act is scheduled for implementation in November 2026 through January 2027, which means there is a possibility that U.S.-issued stablecoins will need to be accepted as domestic payment methods, making this an urgent situation in terms of timing.”

Min Byung-deok (Democratic Party) emphasized the legislative stakes: “Whether Korea creates a won-denominated stablecoin that the world can safely and conveniently use, and whether Korea becomes a new G2 nation that dominates the world by riding the dollar tsunami, will depend on the legislative process.”

Shin Jang-shik (Innovation Party) added that “stablecoins involve many contentious issues such as issuer identity and foreign issuer registration. The reality is that we are facing difficulties because we have not been able to create laws that resolve these issues according to Korea’s circumstances.”

U.S. Regulatory Framework Analysis

The forum analyzed the U.S. Office of the Comptroller of the Currency (OCC) stablecoin rulemaking notice (NPRM) released in February. Kim Jong-seung explained that the U.S. framework treats stablecoins as a new asset category distinct from securities, and permits tokenized assets as reserve assets. He noted that “the U.S. regulatory framework appears to have an intentional goal of establishing a global standard.”

Kim further detailed that the framework classifies stablecoins as a new asset type not falling under existing financial product categories, and that they are subject to the GENIUS Act rather than existing securities or deposit insurance laws.

Key Requirements for Stablecoin Issuers

Kim identified core requirements for payment stablecoin issuers (PPSI) as follows: stablecoins as the sole business activity; prohibition on interest payments; suspension of new issuance if reserves fall short; and tokenized reserve assets. Regarding tokenized assets, he stated: “The U.S. is discussing whether it is appropriate to allow up to 20% of total reserve assets to be tokenized assets, and it is remarkable that the discussion has advanced to this level.” He identified on-chain real-time verification technical implementation as a key challenge.

Korean Legislative Gaps and Proposed Solutions

Han Seo-hee outlined critical legislative issues for Korea. On stablecoin definition, she stated that “the function as a payment method needs to be more strongly emphasized.” She noted that current proposed bills use inconsistent terminology and apply different standards to linked assets, requiring clear classification and concept definition.

Regarding issuer identity, Han noted that a proposal under discussion involves banks holding 51% or more of issuer equity. She pointed out that banking law limits banks to owning no more than 15% equity in other companies, requiring regulatory review. She also identified the absence of discussion on distribution structure and proposed permitting distributions involving related parties.

On reserve assets, Han stated: “Considering liquidity issues given that Korea lacks short-term government bonds, there is a need to expand eligible reserve assets.”

U.S. Interest Prohibition vs. Korean Compensation Framework

Kim Jong-seung explained that the U.S. GENIUS Act explicitly prohibits stablecoin interest payments, with the implementing regulation including a reverse-burden-of-proof condition. He noted: “The interest payment clause could force a restructuring of multiple business models in the existing digital asset ecosystem.”

Han Seo-hee countered that “fintech businesses should be permitted to provide benefits based on user behavior, independent of the issuer and not classified as interest, as this is necessary to activate distribution.”

Infrastructure-Based Regulatory Approach

Lee Jong-seop (Seoul National University) emphasized: “I want to stress that stablecoins should be approached from an infrastructure perspective as a ‘digital payment rail.’” He argued that understanding the U.S. legal framework’s infrastructure approach is essential, rather than viewing stablecoins merely as a payment method or financial product.

Lee suggested that Korea reference U.S. standards in its regulatory approach and noted that introducing a won-denominated stablecoin could create demand for short-term government bonds.

Global Industry Perspectives

Nicky Ariyadsinghe (Chainlink Labs APAC and Middle East VP) identified key blockchain infrastructure challenges as transparency, real-time inquiry capability, and security stability. Park Hyuk-jae (Base East Asia) highlighted public chain necessity and agentic payment response mechanisms as key discussion points.