“Separate customer assets, no capital restrictions”… Easing entry regulations to catch up with the US and Japan

The Democratic Party has decided to significantly relax the issuance requirements for stablecoins compared to its original plan due to concerns that overly high barriers could further delay the development of the stablecoin-related industry. In a situation where major countries like the United States, Japan, and Singapore are competing for stablecoin supremacy, the government and ruling party aim to boost industrial competitiveness by allowing startups from various fields to participate in won stablecoin issuance. According to the virtual asset industry and political circles on the 9th, during three bill review sessions with industry and academic experts after Democratic Party lawmaker Min Byung-deok released the Digital Asset Basic Law draft in April, such opinions were expressed. The consensus was that excessively strict issuance requirements would block fintech and virtual asset startups with diverse ideas and high technological capabilities from entering the market. An industry official stated, "If the entry barrier is set at over 5 billion won, there's a high likelihood that the issuance business will be dominated by banks and large corporations with sufficient capital," adding that "startup entry difficulties will hinder industry diversity and expandability." However, some argue that since stablecoins are expected to become a new payment method replacing cash and credit cards, entry requirements should remain strict. Lee Jun-seok from the Reform Party previously pointed out during an election debate that "With a reserve fund of 5 billion won, anyone could issue won stablecoins," warning of potential market confusion and fraud. Considering these concerns, the Democratic Party also plans to add provisions strengthening financial safety, such as ensuring users can be refunded if an issuing company goes bankrupt through an "insolvency isolation" mechanism. They fundamentally aim to prepare reserves at a 1:1 ratio with the won and establish various physical and human security measures to prevent user damage. The bill is expected to accelerate won stablecoin issuance, with global stablecoin payment markets growing 80% year-on-year, reaching over $10 billion in cumulative payment volume by February this year.