Korea's Digital Asset Law Fixates on Who Issues Stablecoins
South Korea's Digital Asset Basic Act debate is stalled on who can issue won-denominated stablecoins. Hanyang University Professor Kang Hyoung-goo argues the law's success depends on fair competition, not pre-selecting issuers. He states the government should set strict standards for capital, reserves, and consumer protection. Any firm meeting these standards, including non-banks, should compete to foster innovation and financial stability.
The fight over who issues won stablecoins misses the real point. Korea's Digital Asset Basic Act should focus on setting rigorous, functional standards for all players. This means requiring sufficient equity capital, one-to-one reserve assets, and robust anti-money laundering controls. The goal is financial stability and user protection, not parcelling out licenses to favored sectors.
This approach opens the door for both banks and non-banks. Banks offer strong reserve management and customer trust. Tech firms bring user experience, AI, and platform integration. Japan's first stablecoin came from a startup. Allowing market competition among all qualified firms will accelerate innovation in Korea's digital finance. This will also help Korea compete with dollar stablecoins and global AI ecosystems.
The thing to watch is whether the final law prioritizes market-driven selection over government allocation of issuance rights. If the Act allows broad entry based on strict risk management, it will boost Korea's trade settlement and AI agent payments. If it restricts competition, Korea risks falling behind international standards and innovation.
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