South Korea Weighs Bank-Majority Rule for Won Stablecoins

South Korea's proposed Digital Asset Basic Act would require banks to hold at least 50% plus one share in any consortium authorized to issue won-denominated stablecoins, according to a November 12 report by ZDNet Korea. The Financial Services Commission is expected to present the bill's main provisions during November, opening a parliamentary fight over who controls Korea's digital currency plumbing.

The stakes are simple. Banks would run issuance. Crypto exchanges and payment companies would handle distribution, customer transactions and merchant settlement. The Bank of Korea backs this arrangement, arguing privately issued stablecoins could achieve wide payment adoption and disturb financial markets if left outside bank control.

The FSC, for its part, has said issuer ownership requirements are not yet final. Everything remains subject to the legislative process, which has already slipped amid disputes over issuer eligibility, ownership limits on crypto exchanges and consumer protection standards.

What does the framework actually cover?

Regulators are drafting provisions that reach across four areas:

• stablecoin issuance and licensing
• distribution channels
• payment services
• consumer protection requirements

The FSC targeted November for parliamentary review of these rules, which would govern digital asset issuance, distribution and licensing across the board. A financial regulatory representative said stablecoin services used for electronic payments may also need to comply with South Korea's Electronic Financial Transactions Act, covering customer funds held for payments, settlement balances, transaction records and dispute resolution procedures.

Lawmakers are separately debating whether payment service providers should maintain dedicated safeguards for customer assets received before transactions complete.

Why fintech firms are pushing back

Not everyone accepts the bank-majority design. Speaking at a November 12 National Assembly forum on trustworthy infrastructure for won stablecoins, VIDEX CEO Ryu Hong-ryeol urged lawmakers to widen the issuer pool.

"Licensing standards should be established based on business capabilities and risk management systems rather than limiting issuers to banks," Ryu said.

He argued a bank-centered framework would stop technology companies from fully using their expertise in blockchain infrastructure and payment processing. Instead, he proposed evaluating applicants on their ability to manage reserve assets, control token issuance and redemption, and undergo independent verification.

His division of labor: banks manage reserves and liquidity requirements, technology companies handle blockchain operations, private keys and payment services.

"Financial institutions and technology companies are in a mutually complementary relationship, not a replacement," Ryu said.

Forum participants also discussed requirements for wallet custody, key management, multisignature security and auditing, while legal experts called for clearer rules on stablecoin payments, settlement services and transactions across public and private blockchains.

Where does the Upbit–Naver Financial merger fit?

The framework lands as Dunamu, operator of the Upbit exchange, and Naver Financial prepare their own business combination. Under their agreement, Naver Financial would acquire Dunamu through a share exchange, fusing a major digital asset trading platform with an established online payments business.

The division of labor mirrors the proposed law. Dunamu would provide crypto trading and stablecoin distribution. Naver Financial would handle merchant payments and settlements.

Final regulatory approval has not arrived. On November 10, South Korea's Fair Trade Commission began formal deliberations after examining potential competition restrictions, identifying 10 affected markets including cryptocurrency exchanges, online payments and the future won stablecoin market. The review specifically asked whether linking stablecoin issuance, trading and merchant payments could make it harder for rivals to attract customers. The companies have submitted proposed corrective measures, which the commission will weigh before deciding.

What does this change for Korean payments?

Infrastructure work is already moving. In October, Gwangju Bank and Toss completed a QR payment trial connecting banking applications with merchant payment terminals. In September, Kakao Pay and KakaoBank signed a stablecoin agreement with Fireblocks to examine digital asset infrastructure and test distribution arrangements.

The banks are not waiting for the ink to dry. They are building the rails while lawmakers argue over who gets to drive the train.

The November parliamentary session will show whether the bank-majority threshold survives fintech opposition, and the Fair Trade Commission's pending decision on the Dunamu–Naver Financial combination will shape how concentrated Korea's stablecoin market becomes before the first token is even issued.