South Korea’s Landmark Move: Unveiling Robust Stablecoin Licensing for Won-Backed Digital Assets

Key Points

1. South Korea is shifting from a registration approach to a licensing model for won-backed stablecoins to enhance oversight and consumer confidence.

2. Hwang Sei-woon advocates for higher capital requirements for stablecoin issuers, citing their broader utility and potential systemic impact.

3. Proposed capital requirements for stablecoin issuers may exceed those for prepaid payment instruments (2 billion won) and electronic money businesses (5 billion won).

4. The licensing model aims to mitigate risks such as operational failures and unexpected redemption demands, aligning with AML and CTF efforts.

5. This regulatory shift is part of South Korea's broader strategy to balance crypto innovation with market stability and consumer protection.