South Korea is tightening its focus on stablecoin regulation. Yesterday, the National Planning Committee summoned financial regulators to assess current oversight and propose measures that reduce risks for consumers and the broader economy.
Authorities Review Stablecoin Capital Requirements
In the latest meeting, the State Planning Commission’s virtual asset task force received updates from financial regulators on the growing stablecoin market.
Related: The Biggest Banks in South Korea Team Up to Create a New Crypto
According to Maeil Business, officials discussed raising the bar for market entry by setting more specific capital requirements for issuers.
Currently, two draft bills are under consideration. One, introduced by Democratic Party lawmaker Min Byung-duk, proposes a minimum capital requirement of 500 million won (about $360,000).
A separate proposal from the party’s political committee recommends doubling that to 1 billion won (about $720,000).
Both bills aim to prevent market disruption by discouraging underfunded or poorly managed crypto asset firms from issuing stablecoins. However, industry experts and regulators warn that even the proposed thresholds may not be sufficient to prevent abuse or instability.
Preventing Consumer Harm and Market Abuse
Regulators raised concerns that low capital barriers could allow small operators to issue stablecoins without the ability to maintain adequate reserves or manage associated risks.
There are also growing instances of firms designing stablecoins with interest-earning structures using customer deposits, models that could expose users to unregulated financial products.
Notably, the push for regulatory reform follows reports that some domestic crypto operators are preparing to issue stablecoins without meeting capital requirements or by implementing interest-bearing structures tied to customer deposits, raising urgent concerns about consumer protection.
Meanwhile, officials emphasized the need for a more structured legal framework to address these risks. With interest in virtual assets increasing under the new administration, the government appears determined to close regulatory gaps and strengthen oversight to prevent further disruption.
Related: South Korea’s Ruling Party Denies State-Backed Stablecoin Plans
To inform their discussions, financial authorities also reviewed how other advanced economies regulate stablecoins. In the United States, only institutions approved by the government are permitted to issue stablecoins.
Similarly, the European Union and Japan enforce strict capital and compliance standards. South Korea aims to align itself with these international practices. The goal is to build a trusted digital asset ecosystem while safeguarding users from unregulated activity.
Upbit Partners Naver Pay to Introduce Stablecoin
Meanwhile, current information going around on X disclosed that leading South Korean crypto exchange Upbit is partnering with Naver Pay to introduce a stablecoin tied to the Korean won.
The joint project aims to streamline digital payments, reduce the “kimchi premium” in crypto markets, and enable faster on-chain transactions.
Notably, a spokesperson for South Korea’s ruling Democratic Party (DPK) has denied reports that the government is developing a state-backed Korean won stablecoin. He called the claims “groundless.”
The confusion arose from misinterpreted remarks by DPK policy chief Jin Sung-joon, which the party says were inaccurately reported and do not reflect any official initiative.
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