South Korea is considering a rule requiring banks to hold a majority stake in consortiums that issue won-denominated stablecoins. The proposal is still under debate. Fintech firms say licensing should depend on an applicant’s safeguards and capabilities, not simply whether it is a bank.
- A proposal would require banks to hold at least 50% plus one share in authorized issuer consortiums.
- Non-bank firms may help with distribution and payments, but their eligibility to issue tokens remains contested.
- Broader legislation could set rules for issuance, licensing and consumer protections.
- A separate competition review is examining the proposed Naver Financial, Dunamu combination.
A bank-majority proposal, not settled policy
ZDNet Korea reported on November 12 that lawmakers remained divided over whether banks should hold at least 50% plus one share in consortiums issuing stablecoins pegged to the Korean won. The proposed threshold concerns ownership. Available reporting does not establish whether separate voting-rights requirements would apply.
The Financial Services Commission (FSC) said issuer ownership requirements had not been finalized. The bank-majority structure remains a proposal under discussion, not an enacted rule.
Under the proposal, cryptocurrency exchanges and technology companies could help with distribution, customer transactions and merchant settlement, the process of transferring and reconciling payments to businesses. That would not necessarily make them eligible to issue stablecoins. Fintech firms object to this distinction: taking part in payments is not the same as being allowed to create the token.
The debate is part of the proposed Digital Asset Basic Act, which is expected to cover digital-asset issuance, distribution and licensing, along with stablecoin safeguards. The FSC was expected to present the bill’s main provisions in November after consulting other government agencies, and parliamentary review was targeted for that month. Those were reported expectations. They do not confirm that the bill passed or that commercial won-stablecoin issuance was authorized.
The Bank of Korea supports a bank-centered approach. It has warned that privately issued stablecoins could become widely used for payments and affect financial markets. If households and businesses rely on a payment token to move money, it could become significant well beyond crypto trading. The specific financial-market risks remain part of the wider policy debate.
Banks could provide a familiar regulatory anchor, but their involvement alone does not determine how reserves must be held, how quickly tokens can be redeemed, or who is liable if a service fails. Those protections depend on the rules and how they are enforced, not just on the ownership structure.
Fintech firms make the case for capability-based licensing
At a National Assembly forum on November 12, VIDEX CEO Ryu Hong-ryeol argued that regulators should assess applicants’ business capabilities and risk controls instead of reserving issuer licenses for banks.
“Licensing standards should be established based on business capabilities and risk management systems rather than limiting issuers to banks.”
Ryu proposed checking whether applicants can manage reserve assets, control issuance and redemption, and undergo independent verification. In his suggested division of work, banks could manage reserves and liquidity, while technology companies handled blockchain operations, private keys and payment services.
That arrangement could draw on different areas of expertise, but it would need clear lines of responsibility. If reserves fall short, a token cannot be redeemed, or a payment system fails, customers need to know who is accountable and how to seek redress.
“Financial institutions and technology companies are in a mutually complementary relationship, not a replacement, ” Ryu said. Cooperation may be practical, but it does not explain who bears the losses if partners disagree or one of them fails.
Forum participants also discussed wallet custody, key management, multisignature security and auditing. Multisignature systems require multiple keys or approvals to complete an operation, reducing reliance on a single person or device. Legal experts called for clearer rules on stablecoin payments and settlement, including transactions involving both public and private blockchains.
Payment safeguards and competition concerns
A financial regulatory representative said stablecoin services used for electronic payments may fall under South Korea’s Electronic Financial Transactions Act. Possible requirements could cover customer funds, settlement balances, transaction records and dispute resolution. The scope of those rules remains unclear. Payment services, custody and token issuance are distinct activities, and may not all receive the same treatment.
The practical questions matter. Consumers may need a way to recover funds after an erroneous payment. Merchants need to reconcile transactions, and regulators may need records to investigate disputes. Any framework will have to address these needs while distinguishing between services.
Competition policy is also at stake. Naver Financial plans to acquire Dunamu, the operator of Upbit, through a share exchange. On November 10, the Fair Trade Commission began formal deliberations on the proposed combination and identified 10 affected markets, including cryptocurrency exchanges, online payments and the prospective won-stablecoin market.
The commission is examining whether combining stablecoin issuance, trading and merchant payments could make it harder for rivals to attract customers. Naver Financial and Dunamu submitted proposed corrective measures for the commission to consider, but reported details do not specify what they involve. The combination had not received final regulatory approval at the time of the review.
The review points to a tension in the policy debate. Authorities may want banks to anchor issuance for stability, while also scrutinizing whether large companies could bundle stablecoins with exchange access and payments in ways that disadvantage competitors. A payment token may make transactions easier. Control over where customers buy, hold and spend it can also create market power.
Payment initiatives are not proof of stablecoin use
Companies have been exploring payment and digital-asset infrastructure while the rules remain unsettled. In October, Gwangju Bank and Toss completed a QR-payment trial linking banking applications with merchant payment terminals. The reported trial does not show that it used an issued won stablecoin.
In September, Kakao Pay and KakaoBank signed an agreement with digital-asset infrastructure company Fireblocks to examine infrastructure and test distribution arrangements. That work shows interest in possible stablecoin services, not commercial issuance or widespread use.
Trials can help uncover operational issues, but they cannot settle the regulatory questions: who may issue a won stablecoin, what reserves must back it, how redemption works, and how customer funds are protected.
Key questions about South Korea’s stablecoin proposal
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Would banks hold a majority stake in won-stablecoin issuers?
The proposal would require banks to hold at least 50% plus one share in authorized issuing consortiums. The requirement has not been finalized.
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Could exchanges and technology companies take part?
The proposal appears to leave room for non-bank firms in distribution, customer transactions and merchant settlement. That does not mean they would be eligible to issue tokens.
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What safeguards might payment rules require?
Possible requirements include protections for customer funds and settlement balances, transaction records and dispute resolution. It is unclear how the Electronic Financial Transactions Act would apply in the end.
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Has the Naver Financial, Dunamu combination been approved?
No final approval was reported. The Fair Trade Commission began formal deliberations and is considering corrective measures submitted by the companies.
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When could commercial won-stablecoins be issued?
No launch date has been set. Issuer eligibility, safeguards and the legislation itself remain subject to regulatory and parliamentary decisions.
South Korea still has to decide who may issue a won stablecoin, how to protect reserves and redemption, who answers when payments fail, and how to stop a small group of firms from controlling access to the market. A bank-majority rule may address some oversight concerns, but it cannot replace clear safeguards or fair competition.
