Following the lead of the EU, UK, and US financial authorities, the Central Bank of Korea announces standards for issuing stablecoins.
According to the South Korean regulator, the issuance of stablecoins requires more stringent rules than other digital currency operations, as stablecoins can potentially affect the stability of the national financial system.
The primary requirements for entities issuing stablecoins will concern ensuring minimum capital and reserve assets to mitigate the risk of insolvency. The Central Bank of Korea also emphasizes the importance of frequent external financial audits, making them mandatory. The regulator also institutes registration and licensing procedures for companies engaged in operations with cryptocurrency assets.
Many politicians in South Korea believe that the cryptocurrency market should be regulated by a new special legislative framework, as cryptocurrencies are substantially different from commodities, securities, or traditional (fiat) currencies for the existing laws to be successfully applied. The latest report from the Central Bank of Korea also affirms this attitude.
However, the discussion on legislation related to cryptocurrencies has recently stalled in South Korea because of partisan conflicts over the national budget.