South Korea Greenlights Stablecoins with ₩500M Equity and Refund Reserve Rules”

South Korea’s newly elected President, Lee Jae‑myung, is moving swiftly to fulfill his campaign pledge by enabling local firms to issue stablecoins. Lee, a strong supporter of crypto innovations, wasted no time advocating for regulatory change—his inauguration has fast‑tracked plans that could significantly boost South Korea’s expanding digital assets sector

South Korea: The Next Crypto Hub In Asia?

On Tuesday, the ruling Democratic Party introduced the Digital Asset Basic Act, a measure designed to enhance transparency and foster competition in the cryptocurrency industry. The act permits South Korean companies to issue stablecoins, provided they hold at least ₩500 million (approx. $368,000) in equity and maintain sufficient refund reserves. Importantly, issuance also requires prior approval from the Financial Services Commission

The move follows the widespread fallout from TerraUSD’s collapse in 2022. Terra was based in South Korea and its failure erased around $40 billion in market value, underscoring the need for stronger oversight.

This legislation marks a pivotal step in South Korea’s crypto evolution. The country boasts around 18 million cryptocurrency users—nearly one-third of its population

 Rising Stablecoin Adoption

Stablecoins, which are pegged to fiat currencies like the US dollar, have grown to become essential components of the global crypto environment. In the first quarter alone, transactions in USDT, USDC, and USDS on South Korea’s top five exchanges reached approximately ₩57 trillion

 Central Bank Concerns

Despite the legislation’s momentum, Bank of Korea Governor Rhee Chang‑yong has voiced caution. He warned that stablecoins issued by non-bank entities could undermine monetary policy effectiveness. He argues that perhaps only a central bank-issued stablecoin should be trusted with protecting currency stability