South Korea’s Governing Party Introduces Policy Permitting Companies to Launch Stablecoins: Bloomberg

South Korean President Lee Jae-myung’s Democratic Party submitted a bill to parliament that would allow qualifying companies to issue stablecoins, as reported on Tuesday. The Digital Asset Basic Act aims to enhance transparency and promote competition in the cryptocurrency space. Companies would be permitted to issue their own stablecoins as long as they possess at least 500 million won ($368,000) in equity capital and can guarantee refunds through reserves, along with receiving approval from the Financial Services Commission.

Lee, recently elected as president, made several commitments to South Korea’s crypto industry during his campaign, appealing to the nation’s 15 million crypto investors. He emphasized the importance of establishing a won-based stablecoin market “to prevent national wealth from leaking overseas,” as noted in local reports.

Stablecoins are tokens linked to the value of traditional financial assets, such as fiat currencies, with the U.S. dollar being the most common. Their stability acts as a counterbalance to the volatility of cryptocurrencies like bitcoin and ether, allowing users to hold capital in digital assets without the concern of large price fluctuations.

The sector, primarily led by Tether’s USDT, has seen a surge in interest this year, driven in part by advancements in regulations in various markets. The robust performance of USDC issuer Circle’s stock (CRCL) following its initial public offering (IPO) has highlighted the strength of the stablecoin sector, with shares more than quadrupling in value during the first three days of trading. Furthermore, the market capitalization of the sector reached $250 billion for the first time.