Political Tensions Emerge in South Korea Over Stablecoin Regulations
South Korea's political arena heats up as major parties unveil competing legislations on stablecoins, stirring debate on monetary policies.
Political Tensions Emerge in South Korea Over Stablecoin Regulations
South Korea’s political landscape has intensified with two prominent parties presenting conflicting stablecoin bills. The most debated issue concerns the prohibition of interest on stablecoins.
Legislators from the ruling Democratic Party (DP) and the opposition People Power Party (PPP) proposed legislation aimed at supporting won-backed stablecoins in late July 2025.
According to a local news report dated July 28, 2025, “the ruling party insists on banning interest payments to avoid market volatility, while the opposition argues that such measures are essential for the competitiveness of the won stablecoins.”
The diverging proposals reveal differing ideologies regarding innovation, regulatory protection, and monetary sovereignty.
🔥 South Korea introduces legislation for won-backed stablecoin, led by President Lee Jae-myung. Key players Ahn Do-geol and Jin Sung-joon develop a framework focusing on financial stability, drawing lessons from the Terra-Luna crisis. MOEF and BOK collaborate to ensure regulatory… pic.twitter.com/orJuXDWmfS — BiNodes (@BInodes_) July 29, 2025
South Korean Bill’s Response to the Rise of USD-Based Stablecoins
Democratic Party legislator Ahn Do-geol’s bill aims for the issuance and distribution of won-backed digital currencies. Concurrently, PPP’s Eun-hye Kim introduced stricter regulations prohibiting interest payments on stablecoin assets. DP’s initiative stands as the first detailed legislative framework for Korean won-backed stablecoins.
Newly elected President Lee Jae-myung has voiced strong support for stablecoins, aiming to address significant gaps in the Korean financial sector. He has advocated allowing companies with reserves as low as 500 million won (approximately $370,000) to issue stablecoins.
CBDC Initiatives Halted Amid Stablecoin Popularity
The increased adoption of stablecoins has stalled South Korea’s Central Bank Digital Currency (CBDC) endeavors. Following the renewed interest in stablecoins, the nation’s CBDC trial program has been paused since April 2025. A recent statement from the Bank of Korea (BoK) revealed they will hold further developments until government strategies for stablecoins are clarified and integrated with CBDC plans.
