South Korea Proposes 500 Million to 1 Billion Won Capital Requirements for Stablecoin Issuers

South Korea is intensifying its efforts to regulate stablecoins, with new capital requirements under consideration. Two proposed bills are currently being discussed, which would mandate issuers to maintain a minimum capital of 500 million to 1 billion won. These measures are part of a broader effort to align South Korea’s regulatory framework with international standards set by the U.S., EU, and Japan.

In a recent meeting, the State Planning Commission’s virtual asset task force received updates from financial regulators on the growing stablecoin market. The discussion focused on raising the bar for market entry by setting more specific capital requirements for issuers. Currently, two draft bills are under consideration. One, introduced by Democratic Party lawmaker Min Byung-duk, proposes a minimum capital requirement of 500 million won. A separate proposal from the party’s political committee recommends doubling that to 1 billion won. Both bills aim to prevent market disruption by discouraging underfunded or poorly managed crypto asset firms from issuing stablecoins. However, industry experts and regulators warn that even the proposed thresholds may not be sufficient to prevent abuse or instability.

Regulators expressed concerns that low capital barriers could allow small operators to issue stablecoins without the ability to maintain adequate reserves or manage associated risks. There are also growing instances of firms designing stablecoins with interest-earning structures using customer deposits, models that could expose users to unregulated financial products. The push for regulatory reform follows reports that some domestic crypto operators are preparing to issue stablecoins without meeting capital requirements or by implementing interest-bearing structures tied to customer deposits, raising urgent concerns about consumer protection.

Meanwhile, officials emphasized the need for a more structured legal framework to address these risks. With interest in virtual assets increasing under the new administration, the government appears determined to close regulatory gaps and strengthen oversight to prevent further disruption. To inform their discussions, financial authorities also reviewed how other advanced economies regulate stablecoins. In the United States, only institutions approved by the government are permitted to issue stablecoins. Similarly, the European Union and Japan enforce strict capital and compliance standards. South Korea aims to align itself with these international practices. The goal is to build a trusted digital asset ecosystem while safeguarding users from unregulated activity.

In summary, South Korea is taking significant steps to regulate stablecoins by proposing new capital requirements for issuers. These measures are part of a broader effort to align with international standards and protect consumers from the risks associated with unregulated financial products. The proposed bills, which mandate minimum capital requirements of 500 million to 1 billion won, aim to prevent market disruption and ensure that stablecoin issuers have adequate reserves to manage risks. However, industry experts and regulators warn that even the proposed thresholds may not be sufficient to prevent abuse or instability. The push for regulatory reform follows reports of domestic crypto operators preparing to issue stablecoins without meeting capital requirements, raising urgent concerns about consumer protection. The government is determined to close regulatory gaps and strengthen oversight to prevent further disruption, aligning with international practices to build a trusted digital asset ecosystem.