Korea’s digital asset law delayed to 2026 amid stablecoin power struggle

South Korea has postponed the introduction of its Digital Asset Basic Law until 2026 due to disagreements between the Financial Services Commission (FSC) and the Bank of Korea over stablecoin reserve supervision and regulatory enforcement powers. The proposed legislation, which seeks to establish a robust regulatory framework for digital assets, including the introduction of no-fault liability for operators and a mandate for stablecoin issuers to maintain over 100% reserve backing, has been stymied by the complexity of shared oversight between authorities. The delay heightens regulatory uncertainty for businesses within South Korea's sizeable cryptocurrency market, as they await clear guidance on compliance, particularly concerning the handling and licensing of stablecoins. Meanwhile, the ruling Democratic Party of Korea is working to unify various lawmaker proposals into a cohesive approach. President Lee Jae Myung has underscored the importance of a national won-pegged stablecoin to elevate South Korea's role in the global digital finance arena, challenging the US dollar's hegemony in the stablecoin sector.