South Korea's FSC supports BOK-led stablecoin issuance proposal with majority bank ownership
According to the Korea Times, the Financial Services Commission (FSC) has shifted its stance to support the Bank of Korea's (BOK) core proposal, which strictly limits the issuance rights of won-denominated stablecoins to consortia where banks hold a majority stake.
The proposal requires banks to hold more than 50% ownership in the stablecoin issuance consortium, thereby securing absolute control. However, to accommodate innovation needs, the bill also allows technology companies to become the single largest shareholder within the consortium.
Additionally, the proposal sets strict capital requirements for stablecoin issuers, mandating at least 500 billion KRW (approximately 3.7 million USD) in paid-in capital, with the possibility of increasing this threshold in the future based on market developments.
However, despite consensus among financial regulators, the proposal has encountered resistance during the legislative process. Some members of parliament, including those from the ruling Democratic Party, have clearly expressed opposition.
To break the deadlock, lawmakers are expected to establish a special task force to study and propose alternative regulatory frameworks. This move aims to reconcile the differing positions between regulators and certain legislators regarding control risk.
Moreover, the proposal not only addresses control rights for stablecoin issuers but also plans to impose stricter regulatory obligations on cryptocurrency exchanges. These include raising technical stability standards, mandating compensation for user losses caused by hacking incidents, and imposing punitive fines of up to 10% of annual revenue.
In summary, while South Korea's FSC leans toward establishing a highly cautious issuance system led by traditional banks in stablecoin regulation, legislative resistance means the final regulatory framework will need to strike a difficult balance among financial security, technological innovation, and political consensus.
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