The debate over Korea's Digital Asset Basic Act has become fixated on who should be allowed to issue won-denominated stablecoins. Is it right for the government to start by deciding who gets issuance rights first? This law is not about parceling out business licenses to particular industry sectors. It is a law that will design the competitive order of South Korea's digital finance.
There can be no compromise on financial stability and user protection. A stablecoin is not stable by name alone. If impaired reserve assets, large-scale redemption demands and IT or security failures come together, the risk can spread to the payment and settlement network and to financial markets. Issuers must be required to hold sufficient equity capital and technical capacity, maintain one-to-one reserve assets, manage those reserves in safe assets held in segregated custody, redeem at face value promptly, and provide regular disclosures and external verification. Anti-money laundering controls, internal controls and recovery and resolution plans are also essential.
Even so, safety must not be used as a reason to close the door on innovation. What the state should choose is not operators but standards. Regulation must look at actual function and risk, not at the nameplate. Under the principle of "same function, same risk, same regulation," any firm that meets standards for capital, reserve assets, redemption capacity, internal controls and consumer protection should be given the chance to compete. Legal entry routes should be opened on a sector-neutral basis, while licensing should be premised on rigorous review and initial issuance caps, with heavier capital, liquidity and disclosure obligations imposed the greater the impact on the financial system. This is not a call to lower the bar, but to screen applicants on their risk management capability.
Just as there is no reason to exclude banks, there is no reason to exclude non-banks. Issuer qualifications should be judged by the same strict standards. On that basis, banks' reserve asset management, anti-money laundering capacity and customer trust can be combined with technology firms' user experience, programmable payments, artificial intelligence and platform integration capabilities. Startups move fast to test demand that incumbents have not seen. The ecosystem spanning issuance, wallets, payments, settlement and custody needs both competition and cooperation among all of them.
Regimes abroad point in the same direction. The GENIUS Act in the United States brings into the regulatory perimeter not only bank subsidiaries but also non-bank issuers licensed at the federal or state level. Japan's first stablecoin was created by a startup, which is now eyeing a chance to enter the Korean market.
Our competitors are not other domestic industry sectors. They are dollar stablecoins, global platforms and the rapidly forming international settlement and AI ecosystems. While domestic firms divide up the market in advance, technical standards, developer ecosystems and distribution networks are hardening overseas. In South Korea, where trade accounts for a large share of the economy, stablecoins can cut the cost and time of trade settlement and support payments between AI agents as well as small-value, real-time settlement. The government cannot know in advance who will implement this most safely and usefully. Firms that meet the standards should be tested in the market and chosen by users, under rigorous licensing and continuous supervision.
The success or failure of the Digital Asset Basic Act rests not on who holds the first license but on a fair competitive order. Good operators must be able to keep trying, and those that breach the standards must be removed in an orderly way. The government should not pick winners. It should set rules that are strict, transparent and predictable. When firms compete under the same standards, stability becomes the foundation of innovation, and innovation becomes South Korea's competitiveness.
