South Korea’s Political Heavyweights Square Off Over Stablecoin Bills

South Korea’s two largest political parties have taken center stage, unveiling rival stablecoin bills in the country.  The prohibition of interest payments on stablecoins has become the most contentious issue in the stablecoin bills.

Lawmakers from both the ruling Democratic Party (DP) and the opposition People Power Party (PPP) introduced legislation in late July 2025 that could pave the way for won-backed stablecoins. 

According to local news report published on 28 July 2025, “the ruling party believes that interest payments should be banned to prevent market disruption, while the opposition party believes that it is necessary to increase the competitiveness of won stablecoins.”

Each proposal reflects diverging philosophies on innovation, protection and monetary sovereignty.

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South Korean Bill Is In Response To Growing Dominance Of USD-Based Stablecoins

Democratic Party of Korea member Ando-geol introduced the ‘Act on the Issuance and Distribution of Value-Stable Digital Assets’. On the same day, People Power Party member Eun-hye Kim introduced the ‘Act on Payment Innovation Using Fixed-Price Digital Assets’. 

DP’s initiative is the nation’s first comprehensive legislative blueprint specifically governing Korean won-backed stablecoins. The opposition, PPP, meanwhile filed its own version emphasizing stricter financial discipline and explicitly banning interest payments on stablecoin holdings.

Newly elected South Korean President Lee Jae-myung has openly advocated for stablecoins, and his administration has signalled that stablecoins will fill major gaps in the country’s financial landscape.

In his advocacy for stablecoins, Jae-myung has proposed the eligibility of companies with reserves as low as 500M won ($370,000) to be able to issue stablecoins.

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South Korea Pauses CBDC Plans As Stablecoins Gain Ground

Increased market penetration and adoption of stablecoins have put a damper on the South Korean CBDC plans. The country has applied brakes on its CBDC trial program that had been ongoing since April this year in the wake of stablecoin’s resurgence amidst political backing.

The Bank of Korea (BoK) confirmed the current state of affairs in a statement given to Bloomberg on 30 June 2025, through a representative.

Also, a senior representative of one of the seven banks participating in the South Korean CBDC trials informed a local publication that the central bank is holding back until it sees the government’s stablecoin strategy and how CBDCs might integrate with it.

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