South Korea’s stablecoin rulemaking has effectively hit pause, and the reason is straightforward: two top regulators are pulling the framework in different directions. A deepening disagreement between the Financial Services Commission (FSC) and the Bank of Korea (BOK) over stablecoin design meant the government missed its December 10, 2025 deadline, and stablecoin-specific legislation has now slid into 2026.
At the heart of the standoff is the BOK’s proposal that commercial banks must hold at least 51% ownership of stablecoin issuers. That single requirement has become the make-or-break point that neither side has been willing to compromise on so far. The BOK sees a bank-led model as the cleanest way to control reserves, tighten AML oversight, and protect monetary sovereignty, while the FSC views the same rule as an entry barrier that would shut out non-bank fintechs and weaken competition.
Why the DABA Timeline Slipped
The immediate casualty is the Digital Asset Basic Act (DABA), which cannot be finalized cleanly while stablecoin policy remains unresolved. Stablecoin bills were postponed to early 2026 after the December 10, 2025 deadline was missed, leaving the legislative package incomplete. In practical terms, that means firms are operating in a holding pattern: enough direction to know regulation is coming, but not enough clarity to build against.
The delay looks even sharper when placed next to what other hubs have already executed. While Seoul remains in inter-agency negotiations, the EU’s MiCA took effect in June 2025, the U.S. House passed a federal stablecoin bill on July 17, 2025, and Hong Kong launched a stablecoin licensing regime on August 1, 2025. The message to the market is not just that rules are evolving, but that competitors are giving issuers and institutions a clearer runway.
This uncertainty is also slowing local initiatives that would otherwise be moving into implementation. Domestic efforts tied to banks such as KakaoBank and Woori Bank have been delayed as the market waits for legal certainty. With no stable domestic framework in place, reliance on foreign-issued stablecoins persists, and the path to a won-denominated alternative remains operationally difficult.
What This Means for Traders and Institutions
For traders and liquidity providers, the problem is not ideology—it’s execution risk. Policy ambiguity increases counterparty and jurisdictional risk, which can widen spreads, lift hedging costs, and worsen slippage in won-based liquidity pools. When rules are unsettled, liquidity tends to fragment, and risk budgets tighten.
For institutional treasuries, the friction shows up in governance and controls. Without clear standards on reserve transparency, redemption mechanics, and AML/CFT compliance, institutional adoption is harder to justify and harder to defend internally. The lack of finalized guardrails also weakens the market’s ability to trace reserves and enforce accountability, raising operational and reputational exposure for anyone building tokenized cash workflows.
Stepping back, the strategic risk is that uncertainty becomes a competitive tax. If this deadlock persists, capital and talent can drift toward jurisdictions with clearer, faster-moving frameworks, leaving South Korea in a reactive posture. The resolution of the FSC–BOK dispute will ultimately determine whether Seoul builds a credible stablecoin lane or cedes momentum to markets that already offer regulatory certainty.