Asset Exchange Regulation in South Korea: Why the Second Stage of the Law Is Stuck in Disputes

South Korea continues to work on a comprehensive legislative framework for virtual assets, but the implementation of the second phase faces significant obstacles. According to analytical sources, the main reason for the slowdown is deep disagreements between government agencies, market participants, and political factions on several fundamental issues related to digital asset regulation, including a new category of stablecoins.

Stablecoins and Issuers: Where Does the Line Divide?

The central issue of debate is who has the right to issue stablecoins in Korean won. Regulators are considering two models: the first grants exclusive issuance rights to banks, while the second allows designated financial institutions to participate. The industry insists on relaxing the strict separation between the financial sector and the virtual asset market to promote innovation. Experts note that market participants’ position is justified by the fact that flexibility in choosing issuers could accelerate the development of the asset exchange ecosystem in the country and attract new players.

Restrictions on Major Shareholders: Is the Approach Too Strict?

Another sensitive point is the proposal to limit the share of major shareholders on cryptocurrency exchanges to 15-20%. Industry associations criticized this parameter as excessively strict and as an obstacle to capital concentration necessary for the development of large regional trading platforms. Critics argue that such restrictions could drive investments to alternative jurisdictions and slow the emergence of competitive exchanges. Authorities, on the other hand, believe that such limitations protect the market from oligopolization and speculative influence by large investors.

Postponed Initiatives: ETFs and Company Listings

Due to delays in primary legislation, discussions on related topics have also been affected. Negotiations on the introduction of spot ETFs based on virtual assets and the admission of listed companies to trade crypto assets have slowed down. Analysts expect that allowing these initiatives could significantly increase capital flows into the local market and attract retail investors through more familiar financial instruments.

Dialogue Between Authorities and Industry

Currently, multilateral negotiations continue between government officials, representatives of the cryptocurrency community, and parliamentarians of various political orientations. The parties are trying to find a compromise that would ensure sufficient consumer protection without creating excessive barriers to the development of the asset exchange market. The outcome of this dialogue will largely determine the trajectory of South Korea’s cryptocurrency sector in the coming years.