Only Banks May Issue Stablecoins: Korea, Taiwan and Thailand Move in Lockstep

Korea is sending its Digital Asset Framework Act to the National Assembly this month, Taiwan has pre-announced stablecoin licensing rules, and Thailand’s central bank has opened a consultation on baht stablecoins. In a single week, Asia’s regulators locked issuance into the banking system, diverging sharply from America’s nonbank path.

Korea: Bank-led Consortiums, a 15-20% Shareholder Cap and a 135+ Article Framework

According to the Seoul Economic Daily and Korean financial industry sources, the Financial Services Commission (FSC) is in the final stages of coordination, aiming to submit the government draft of the Digital Asset Framework Act to the National Assembly within November. “We are preparing with the goal of having the digital asset framework act introduced within this month,” a senior financial regulator told the media, adding that “not much has changed from the authorities’ earlier draft.” The act is expected to exceed 135 articles (the figure FSC Chairman Lee Eok-won disclosed early this year), covering issuance, distribution, disclosure, listing, operator market access, market order and user protection. It is the second-stage systemic legislation following the first-stage user-protection law.

The contours of the bill’s contentious points have emerged. First, the cap on major exchange shareholders: the authorities intend to follow the standard for alternative trading systems (ATS) under the Capital Markets Act, limiting any single major shareholder to 15%-20% to address profit and control concentrated in a few founders, with a 1-2 year (some say roughly 3 years) grace period during which no penalties apply for reducing holdings; limiting voting rights instead of equity is also under discussion. Second, stablecoin issuers: the Bank of Korea has long argued that won-pegged stablecoins should only be issued by bank-led consortiums, while some ruling-party lawmakers want fintech firms included to boost competitiveness; the bank-led consortium is currently the leading option in the government draft, but specific shareholding ratios and participation requirements remain open. Third, liability for misfiring and computer accidents: the bill is expected to impose no-fault (strict) liability on virtual asset operators for computer incidents, and to make violations of the duty to actually hold virtual assets a ground for sanctions such as business suspension, directly responding to the large-scale accidental bitcoin transfer at an exchange earlier this year.

The bill is also tied to a tax timeline. Deputy Prime Minister and Minister of Economy and Finance Lee Hyeong-ik said on November 5 that he would negotiate with the National Assembly to postpone the virtual asset income tax, originally scheduled to take effect next year, by two years. The ruling party’s logic: build the overall market framework with the framework act first and give businesses and investors an adjustment period, then talk about taxation. The industry is using the moment to demand clarified regulatory standards and permission for derivatives trading.

Taiwan: Majority Financial Holding Ownership and NT$300 Million Capital Lock Tech Firms Out

Taiwan’s Financial Supervisory Commission (FSC) pre-announced on November 3 the draft Regulations Governing the Licensing and Management of Stablecoin Issuance, along with eight supporting VASP authorization rules, opening a 40-day comment period. The core design binds stablecoin issuance eligibility to the financial system: qualified applicants are banks, financial holding companies, joint-stock companies invested in by banks or financial holding companies, and other institutions designated by the FSC. Nonbank issuers must publicly list their shares, focus exclusively on issuing and redeeming stablecoins, and hold minimum paid-in capital of NT$300 million (about US$9.4 million); on ownership, banks and financial holding companies combined must hold more than 50% of the issuer, with any single bank or financial holding company holding more than 25%.

Wang Yun-chung, deputy director of the FSC’s Banking Bureau, said the initial rollout will center on banks and companies backed by financial institutions, and several banks and financial holding companies have expressed interest. The “51% + 25%” dual thresholds borrow from Taiwan’s rules for internet-only banks, with two goals: first, to give the issuer a lead shareholder able to step up on capital raises, compliance and system building; second, to confine tech companies to participation rather than control, in the official’s words, “a technology company acting alone would not fit the initial model we described.” When a single bank or financial holding company owns more than 25%, the issuer’s financial statements must be folded into the group’s consolidated accounts, effectively pulling stablecoin operations into the conglomerate’s supervisory perimeter.

Reserve and operational requirements are equally strict: stablecoins may only be pegged 1:1 to the New Taiwan dollar or a single foreign currency; reserve assets at fair value must not fall below the total outstanding balance, with periodic accountant reviews; issuers must complete customer identity verification, internal controls, business continuity and cybersecurity systems, and are brought under financial-institution AML rules. The FSC expects the rules to take effect in the first quarter of 2027 together with the Virtual Asset Service Act (promulgated July 22, 2026), with a 12-month application window, licensing within 9-12 months, and up to two years of transition buffer. The accompanying VASP rules set risk-tiered thresholds: lending requires NT$200 million paid-in capital plus NT$50 million guarantee deposit; trading platforms and custody NT$100 million plus NT$30 million; exchange/transfer/underwriting NT$50 million plus NT$10 million. Banks entering via dual-license initially get four business lines (exchange, transfer, custody, underwriting), with trading platforms and lending closed for now.

Thailand: Universal KYC, No Offshore Access, Baht Stablecoins as “Controlled Tokenized Money”

The Bank of Thailand (BOT) opened its consultation on baht stablecoin regulation on October 19, with comments due November 17 and implementation targeted for March 2027. BOT Governor Witai Rattanagorn confirmed on October 29 that the stablecoin rules advance alongside regulations for BNPL (buy now, pay later) and large cash gold transactions. The draft clearly borrows from the Hong Kong framework: only a small number of licenses initially, with applicants required to demonstrate added value over existing payment methods; all stablecoin holders must pass KYC; no interest or incentives; redemption within one business day; and reserves initially held only in bank deposits spread across several banks, with short-term government bonds considered later.

Thailand’s distinct feature lies in its foreign-exchange-control dimension: because of capital controls, there is no avenue for issuing foreign-currency stablecoins, and wallet providers are barred from connecting to offshore digital asset exchanges to prevent circumvention of FX controls; the BOT has made clear it will not license retail foreign exchange for speculative purposes, and a Thai-issued dollar stablecoin would fall into that category. The official positioning of the baht stablecoin is deliberately modest: it is described as “a suitable tokenized money for certain payment scenarios, particularly in supporting innovations utilizing DLT technology and linking to tokenized assets,” whose role is to “complement, not replace, the existing payment system,” operating in an open-loop market structure that clearly separates the roles of issuers and wallet providers.

Three Frameworks Compared: One Answer, Three Drafting Styles

Laid side by side, the common signal is clear: East and Southeast Asian regulators treat stablecoins as “payment instruments inside the monetary system,” not as “tradable crypto assets.” Issuance therefore must concentrate in banks (Korea’s consortium, Taiwan’s holding-company control), reserves must be strict (fully backed plus audit), yield must be suppressed (Thailand bans interest outright), and channels must be quarantined (Thailand blocks offshore links; Taiwan’s initial bank dual-license is corporate-client-only). By contrast, the US GENIUS Act (effective January 18, 2027) puts OCC uninsured national trust banks and state-qualified issuers on the same federal track, with Circle, Coinbase and Ripple all taking trust charters, making nonbank issuance an in-system option; the EU’s MiCA goes the licensing route, with Circle issuing USDC/EURC under a French EMI license. Asia’s “bank-monopoly issuance” path is, at bottom, a defensive arrangement against dollar stablecoin penetration, in the same family as Nigeria’s central bank rules that took effect November 5, requiring USDT/USDC to be distributed through locally licensed entities (see our November 7 analysis).

Implications for Practitioners