South Korea's Stablecoin Plan Tries to Balance Innovation and Stability

Kim Sang-hoon, chair of the People Power Party's special committee on stock and digital asset value-up, has proposed a two-track strategy for introducing won-denominated stablecoins in South Korea. The plan aims to balance innovation with stability by having banks issue the stablecoins initially under a '50%+1' rule, which ensures that banks hold a majority stake.

This approach would provide a clear regulatory pathway, leveraging banks' strict financial oversight and reducing the risk of money laundering and consumer harm. Later on, fintech companies would be brought in to handle distribution and drive technological innovation.

Kim stressed that this phased approach is necessary to prevent volatility seen in unbacked cryptocurrencies while still allowing the ecosystem to evolve.