FSS says stablecoins need old payment law as Korea's crypto bill stalls

The vice chairman of Dunamu, the operator of South Korea’s largest crypto exchange, Upbit, has expressed frustration with the pace of regulation in the country on the same day that the Financial Supervisory Service (FSS) proposed adapting its e-payment law to won stablecoins, as the specific legislation for issuers remains stalled.

South Korean stablecoins have to run under e-payment law

Speaking at a separate Seoul forum on stablecoin policy on the same day, the head of South Korea’s Financial Supervisory Service (FSS) electronic finance inspection bureau, Shim Eun-seop, said stablecoins used for payments in the country will have to adapt to the existing Electronic Financial Transactions Act.

The FSS official made the proposal because the Digital Asset Basic Act that was supposed to govern them has still not passed.

Tokenized trading volume is leaving Korea

In a rare public appearance at the D-CON policy conference, Dunamu co-founder Kim Hyung-nyeon noted that the exchange, along with other domestic platforms, are being held back from entering the tokenized equities trade by local regulations that have hit a wall.

That regulatory headwind has caused traders seeking exposure to those products to seek out offshore exchanges already offering tokenized versions of South Korea’s biggest stocks, including Hyundai Motor, Kakao, Naver, Samsung Electronics and SK Hynix.

South Korea is ready to tackle stalled regulation

The law that could help onshore tokenized stock trading activity continues to slip. The government’s draft of the Digital Asset Basic Act is expected later this month, and ruling-party lawmakers at both events pushed for a quick vote.

Political Affairs Committee chair Yoo Dong-su and the Democratic Party’s Rep. Min Byung-duk have both expressed the will to pass the draft once it arrives. Rep. Min Byung-duk committed to a January 18 deadline.

The Financial Services Commission (FSC) is writing its own rules to let tokenized stocks, bonds and funds trade in the country from February 4, 2027. The regulator public is accepting comments on that proposal until November 11.