South Korea’s Ruling and Opposition Parties Push Competing Stablecoin Bills—But Clash Over Interest Payments

South Korea's two largest political parties have both unveiled their individual stablecoins bills. While both parties concur on many of the poignant issues, they both diverge greatly when it comes to the contentious issue of interest payments.

The ruling Democratic Party, led by my MP An Do-geol, named his bill the "Act on the Issuance and Distribution of Value-Stable Digital Assets", while the People Power Party, led by Kim Eun-hye calls her bill the "Act on Payment Innovation with Fixed-Price Digital Assets."

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Both Parties Agree On Many Points

Both bills call for integrating won-based stablecoins into South Korea’s financial regulatory framework by placing them under the supervision of the Financial Services Commission (FSC), the country’s chief financial regulator.

If passed, the legislation would grant the FSC full authority to supervise all aspects of the stablecoin lifecycle, including issuance, distribution, redemption, and emergency interventions in cases where market disruption or consumer harm is suspected.

Additionally, both bills name the FSC as the exclusive agency for licensing KRW-backed stablecoin issuers.

The legislation also introduces stringent requirements for any entity looking to issue stablecoins in South Korea. Issuers would need to be either regulated financial institutions or registered joint-stock companies.

Foreign corporations would be permitted to apply for a license only if they have an operational branch or sales office based in South Korea.

On top of that, issuers must show proof of at least 5 billion KRW in equity capital and demonstrate sufficient IT and compliance infrastructure to support stablecoin operations.

Interest Payments Spark Policy Divide

Despite alignment on regulatory structure, the bills diverge sharply over whether stablecoin issuers should be allowed to offer interest on held assets.

The Democratic Party’s bill proposes a full prohibition on interest-paying stablecoins.

The party argues that allowing stablecoins to offer yields could lead to monetary instability and disrupt financial markets by blurring the lines between traditional savings products and digital assets.

In contrast, the People Power Party’s proposal pushes for interest payments as a means of enhancing the competitiveness of South Korean stablecoins globally.

Kim stated that enabling issuers to offer interest could help expand the reach of won-backed stablecoins in international markets.

Industry opinion appears to be divided. According to a domestic crypto insider quoted by Newsprime

"In the case of dollar stablecoin, interest payments would make them securities under U.S law...I believe that other countries can design regulations for stablecoin in accordance with their own laws."

Seoul Reacts to Global Stablecoin Momentum

South Korea’s regulatory efforts come at a time when stablecoin developments are accelerating globally.

In the United States, the GENIUS Act is gaining momentum, with reports suggesting that major corporations such as Amazon and Walmart are exploring their own stablecoin initiatives to reduce transaction fees and streamline payments.

Faced with this growing international pressure, Seoul appears determined to maintain its competitive edge in digital finance.

South Korean lawmakers are racing to finalize regulatory guidelines to avoid falling behind in the increasingly global race to launch fiat-pegged tokens.

The proposed legislation has already triggered interest among South Korea’s largest tech and financial firms.

Major internet players like Kakao and Naver, as well as credit card companies such as Lotte Card, are reportedly exploring stablecoin issuance strategies in anticipation of a clear legal framework.

With bipartisan support coalescing around a regulatory structure—but a policy rift forming over interest mechanisms—the coming weeks will be crucial in determining the final shape of South Korea’s stablecoin laws.

Whether the country opts for a conservative approach that prioritizes financial stability or embraces innovation to compete globally remains to be seen.