South Korea is on the verge of setting clear rules for stablecoins. Lawmakers are moving fast. If passed, the Digital Asset Innovation Act could reshape how people pay for goods and services. It will also test the strength of banks and card companies.
High Capital Barriers For Issuers
According to reports, any stablecoin issuer must hold at least ₩1 billion (about USD 720 258) in equity capital. That rule will leave small startups on the sidelines. Only big players or deep-pocketed firms will qualify.
The move comes as Democratic Party members on the National Assembly’s Political Affairs Committee prepare to roll out the bill next month. It aims to define stablecoins as “value-stable digital assets” and to lay down clear ground rules.
Pressure On Card Companies
Card providers could feel the squeeze. Based on reports from New Daily Kyungjae, experts warn that stablecoins may weaken the payment base for credit cards. That could threaten the industry’s long-term health.
Card companies are already coping with a rising loan default rate of 1.93% in Q1, nearly brushing against the 2% danger mark. Three of the biggest firms—KB Kookmin, Hana, and BC Card—have already passed 2% this year. Those figures point to trouble if some transactions shift to tokens.
Bank Concerns Rise
The Bank of Korea isn’t sold on stablecoins. It has urged caution and warned that digital tokens might hurt the banking sector. If people start using stablecoins for daily spending, banks could lose fees and deposits.
According to the central bank, that could undercut commercial banking profits. Banks may have to rethink their plans or build their own digital services to keep customers.
Source: The Korea Economic Daily
Tech Firms Ready To Act
While banks and card issuers fret, tech giants are lining up. Naver and Kakao have been working on blockchain projects for years. They see a chance to plug a won-backed token into their apps and services.
Hyundai HT and Hyundai Mobis are also watching closely. Other names on the list include Kocom, MediaZen, Kaon Media, and Bridgetec. Analysts suggest that a Naver stablecoin, linked with web3 services or even the Line chat app in Japan, could open new markets.
Speculation Hits Stocks And Crypto
Investors have already leapt in before the vote. Home-based crypto and stock markets are abuzz. The shares of companies that have been known to look at stablecoins have surged. That indicates growing enthusiasm. But it also comes with danger—if the legislation becomes stalled or altered, prices might reverse direction.
Featured image from Unsplash, chart from TradingView
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