South Korea Advances Bill to Legalize Stablecoins Amid GENIUS Act Delay in US

South Korea is set for a major crypto regulatory overhaul under newly elected President Lee Jae-myung. As Bloomberg reported earlier today, the ruling Democratic Party proposed the Digital Asset Basic Act, with plans to facilitate the use of stablecoins. Will South Korea’s new crypto regulations give it a competitive edge over the US?

South Korea to Establish Regulatory Framework for Stablecoins

According to the latest Bloomberg report, South Korea’s President Lee Jae-myung is set to catapult the country to the forefront of the global crypto industry. With the Digital Asset Basic Act, the country envisions enhancing transparency and fostering competition in the crypto sector.

Notably, Lee had pledged to permit domestic stablecoin issuance during his election campaign. Accelerating his election promise, Lee’s ruling Democratic Party is advancing a crypto bill focused on stablecoins.

As per the bill, local companies will be permitted to issue stablecoins with a minimum equity capital of 500 million won ($368,000). They are also required to secure regulatory approval from the Financial Services Commission and maintain sufficient reserves to guarantee refunds.

“We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” stated Lee in May. In addition to the stablecoin plans, the country is also preparing for other crypto developments. For instance, Lee has proposed that the country’s national pension fund explore Bitcoin and crypto investments. The nation is also exploring the possibility of a Bitcoin reserve. Previously, South Korea proposed amendments to its anti-money laundering (AML) regulations to encourage foreign investor participation in the domestic crypto market.

Will the US Fall Behind South Korea in the Crypto Race?

Donald Trump’s pledge to turn America into the “crypto capital” has gained much popularity, especially in light of his crypto-focused policies. Trump’s Bitcoin reserve plan is widely recognized, with more countries joining the rally.

Though Trump has proposed to regulate stablecoins with clear guidelines, the much-hyped GENIUS Act is still facing challenges. As Senator John Thune filed a cloture motion, the bill is expected to reach its final vote this week. Though Senator Thune’s procedural move limits debate and paves the way for a final vote, the fate of the bill is still unclear. Previously, XRP lawyer John Deaton warned that the stablecoin regulation in the US could be delayed until 2029.

In contrast, South Korea is rapidly advancing its crypto regulatory framework. President Lee Jae-myung’s crypto-focused policies are set to position the country as a leader in the global crypto space. Data from the Bank of Korea reveals that South Korea’s stablecoin trading has seen a significant surge. Transactions involving major US dollar stablecoins hit about $42 billion on five major domestic exchanges in the first quarter.