Rich by Coin

South Korea’s push to formalise crypto regulation has slowed again, with authorities confirming that the Digital Asset Basic Law will not be submitted until 2026. The delay highlights deep divisions over how stablecoins should be supervised in one of Asia’s most active digital asset markets, even as crypto products become more tightly linked to the wider financial system. The delay does not reflect a lack of interest in regulation. Instead, it underlines how complex stablecoin oversight has become for policymakers, balancing innovation, financial stability, and monetary control. With no agreement yet on who should hold ultimate authority, lawmakers have opted to pause rather than advance a bill with unresolved structural gaps.

The Digital Asset Basic Law is intended to act as the backbone of South Korea’s crypto framework. A core aim is investor protection, achieved by holding digital asset operators to stricter legal standards than before. One of the most significant proposals is the introduction of no-fault liability, which would make operators responsible for user losses even if negligence cannot be proven. Stablecoins have emerged as the main fault line in the debate. The Financial Services Commission and the Bank of Korea have yet to align on how responsibilities should be divided. These disagreements have complicated decisions around licensing, enforcement powers, and the treatment of reserve assets. The postponement has not triggered an immediate market reaction, but it adds another layer of uncertainty for crypto firms operating in South Korea. Exchanges, payment providers, and stablecoin issuers continue to expand in an environment where long-term regulatory expectations remain unclear.

Political dynamics are also shaping the timeline. President Lee Jae Myung has identified a Korean won-backed stablecoin as a national priority, arguing that it could counter the growing dominance of US dollar-linked stablecoins in global crypto markets. These ambitions increase pressure on regulators to ensure that any framework aligns with broader monetary policy goals. The delayed Digital Asset Basic Law is meant to represent the second phase of South Korea’s crypto regulation. The first phase, already in force, targeted unfair trading practices.