South Korea's Stablecoin Bill Stalls as Ruling Party Fails to Reach Consensus

VADODARA, January 28, 2026 — South Korea's ruling Democratic Party has failed to reach an internal consensus on critical provisions of its planned Digital Asset Basic Act, its digital asset task force announced today. According to a report from Edaily, the deadlock centers on sensitive issues including the scope of the Bank of Korea's authority and restrictions on major shareholders of cryptocurrency exchanges. Task force chairman Lee Jeong-moon confirmed that opinions remain sharply divided, particularly on a proposal to grant issuance rights for won-denominated stablecoins exclusively to consortiums where banks hold a controlling stake exceeding 51%. This latest crypto news injects fresh regulatory uncertainty into a key Asian market, potentially delaying comprehensive digital asset legislation until after the Lunar New Year holiday next month.

Investigation: The Core Deadlock Points

Market structure suggests the impasse stems from two primary friction points. First, the proposal to restrict won-pegged stablecoin issuance to bank-dominated consortiums faces significant internal opposition. Lee Jeong-moon stated that a compromise plan sent to the Bank of Korea and the Financial Services Commission has not yet been agreed upon, indicating a deep institutional divide over monetary policy control. Second, a separate proposal to cap any major shareholder's stake in a crypto exchange at 15% was deferred. Despite a general consensus on the measure's intent to prevent market manipulation, Lee cited concerns over legislative strategy, effectively postponing a decision. Consequently, the party plans to introduce its version of the bill only after further internal and government discussions, as detailed in the original report from Edaily.

Market Context & Historical Precedent

Historically, South Korea has oscillated between aggressive regulatory crackdowns and progressive frameworks, creating a volatile environment for digital assets. Underlying this trend is a pattern of legislative delays that often precede significant market corrections. In contrast, jurisdictions like the European Union have moved forward with unified regulations like MiCA, providing clearer operational guidelines. This stall mirrors the 2021-2022 period when similar internal debates slowed South Korea's Virtual Asset User Protection Act, contributing to localized liquidity drains. , the current deadlock occurs amid broader global regulatory fragmentation, where U.S. states like South Dakota are advancing their own Bitcoin bills, and South Korea itself has mandated crypto disclosure in real estate deals, highlighting a piecemeal approach to oversight.

Technical Architecture & Price Action

On-chain data indicates that regulatory uncertainty often triggers a liquidity grab near key technical levels. Bitcoin, currently trading at $88,957, faces immediate resistance at the $90,000 psychological barrier. The 50-day exponential moving average (EMA) at $87,200 provides near-term support, while a deeper Fibonacci retracement level from the 2025 cycle sits at $85,500. Market analysts note that the Relative Strength Index (RSI) on daily charts hovers near 45, suggesting neutral momentum with a bearish bias. This technical setup, combined with the news from Seoul, creates a classic Fair Value Gap (FVG) scenario where price may seek equilibrium lower if support fails. The deferred stablecoin rules directly impact the on-chain settlement layer for Korean won, potentially increasing transaction costs and reducing arbitrage efficiency.

By The Numbers

Why It Matters

This regulatory stall matters because South Korea represents one of the largest and most retail-active cryptocurrency markets globally. A delayed Digital Asset Basic Act creates a legal vacuum, allowing existing vulnerabilities in exchange governance and stablecoin issuance to persist. Consequently, institutional investors may delay capital deployment into Korean digital asset ventures, impacting liquidity flows. Market structure suggests that such uncertainty often leads to increased volatility, as seen in parallel scenarios where U.S. ETF outflows drive selling pressure. , the bank-centric stablecoin model, if adopted, could set a precedent for other Asian economies, potentially fragmenting global stablecoin standards versus decentralized alternatives.

Expert Commentary

"The inability to reach consensus on bank control over stablecoins reveals a fundamental tension between traditional financial sovereignty and crypto-native innovation. Historical cycles suggest that such delays often precede regulatory arbitrage opportunities, where capital migrates to clearer jurisdictions. For the 5-year horizon, this the need for global coordination, as outlined in frameworks like the Financial Stability Board's recommendations on stablecoin regulation." – CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Market analysts outline two primary data-backed scenarios based on current structure. First, a bearish scenario where the regulatory impasse prolongs, triggering a sell-off below key support. Second, a neutral-bullish scenario where the delay is priced in, and markets consolidate awaiting clarity.

• Bullish Invalidation Level: $92,500. A sustained break above this resistance, coinciding with a positive regulatory resolution, would confirm a trend reversal and target the previous all-time high zone.
• Bearish Invalidation Level: $85,500. This Fibonacci 0.618 support level must hold to maintain the current bullish market structure. A break below would likely trigger a deeper correction toward $82,000.

The 12-month institutional outlook remains cautious. If the bill passes with strict bank controls, it could legitimize won-pegged stablecoins but centralize power, potentially stifling innovation. Conversely, further delays may push activity offshore, as seen in cases where institutions like Bitmine accumulate assets in less restrictive environments. For the 5-year horizon, this event highlights the growing pains of integrating digital assets into national financial systems, with South Korea serving as a critical test case for Asia.