South Korea is likely to end the year without a framework for locally issued stablecoins, amid ongoing disputes over the role of banks in stablecoin issuance.

The country’s central bank, the Bank of Korea (BOK), and other financial regulators have clashed over the extent of banks’ involvement in issuing Korean won-backed stablecoins, delaying a framework widely expected to arrive in late 2025, the Korea JoongAng Daily reported Tuesday.

According to the BOK, a consortium of banks should own at least 51% of any stablecoin issuer seeking regulatory approval in South Korea, while regulators are more open to the involvement of diverse industry players.

“Banks, which are already under regulatory oversight and have extensive experience handling anti-money laundering protocols, are best positioned to serve as majority shareholders in stablecoin issuers,” a BOK official reportedly said.

Banks should play leading role to curb stablecoin risks, BOK says

The central bank said that giving banks a leading role in stablecoin issuance would help mitigate potential risks to financial and foreign exchange stability.

The BOK also warned that allowing non-bank companies to take the lead in issuing stablecoins could undermine existing regulations that bar industrial firms from owning financial institutions, as stablecoins effectively function like deposit-taking instruments by collecting funds from users.

“Allowing non-bank companies to issue stablecoins is essentially equivalent to permitting them to engage in narrow banking — simultaneously issuing currency and providing payment services,” the BOK reportedly wrote in a recent stablecoin study. It added that stablecoins issued by technology firms could also pose monopoly risks.

Three stablecoin bills under review

The Financial Services Commission (FSC) was expected to introduce a regulatory framework for won-backed stablecoins as part of a government bill in October.

According to a report by the local industry publication Bloomingbit, the National Assembly’s Political Affairs Committee is now reviewing three bills related to stablecoin issuance submitted by ruling and opposition party lawmakers on Monday.

The proposed legislation includes two bills put forward by the ruling Democratic Party of Korea (DPK) and one from the opposition People Power Party (PPP).

While all three proposed bills stipulate a minimum capital of 5 billion won ($3.4 million) for issuers, some of the disputed areas include whether stablecoin issuers should be allowed to offer interest on holdings.