South Korea’s long-awaited Digital Asset Basic Law has been pushed back to 2026, as top financial regulators remain locked in a power struggle over how stablecoins should be supervised. The delay highlights growing tensions between agencies at a time when crypto regulation is becoming increasingly urgent in one of Asia’s biggest digital asset markets.
According to legislative sources, lawmakers decided to pause progress on the bill after failing to resolve disagreements between the Financial Services Commission (FSC) and the Bank of Korea. At the center of the dispute is who should control stablecoin reserve oversight and licensing authority — a question that has stalled the creation of a unified regulatory framework.
The Digital Asset Basic Law is intended to act as the backbone of South Korea’s crypto regulations. Its main goal is to improve investor protection by placing tougher legal obligations on digital asset businesses, including exchanges, issuers, and other service providers.
One of the bill’s most notable proposals is the introduction of no-fault liability. Under this rule, digital asset operators could be held responsible for user losses even if negligence is not proven. Supporters say this would significantly strengthen consumer protection, while critics argue it could increase compliance costs and legal risk for firms.
Stablecoins are another major focus of the draft legislation. The bill would require stablecoin issuers to hold reserves worth more than 100% of their circulating supply. These reserves would need to be kept in segregated accounts at banks or approved custodians, separate from the issuer’s own balance sheet. The aim is to reduce contagion risks and prevent a repeat of past stablecoin collapses that shook global crypto markets.
Despite broad agreement that stronger oversight is needed, regulators have yet to agree on how responsibilities should be divided. Disputes over enforcement powers, reserve asset treatment, and licensing authority have made it difficult to move forward without leaving major structural questions unanswered. Rather than push through a flawed framework, lawmakers chose to delay the bill.
The postponement extends regulatory uncertainty for crypto businesses operating in South Korea. Exchanges, payment companies, and stablecoin issuers now face continued ambiguity around compliance requirements, which could impact product launches, investment plans, and long-term strategy.
Meanwhile, the ruling Democratic Party is working to merge several competing proposals from lawmakers into a revised digital asset bill. President Lee Jae Myung has also emphasized the importance of developing a Korean won-pegged stablecoin, calling it a strategic tool to challenge the dominance of U.S. dollar-backed stablecoins in global crypto markets, according to the presidential office.
The delayed Digital Asset Basic Law represents the second phase of South Korea’s crypto regulation. The first phase, which is already in effect, focused on curbing unfair trading practices in the digital asset sector. Until the next phase is finalized, however, the country’s broader crypto rulebook remains unfinished.
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