[Issue Analysis] Partnership between Banks and Tech Companies? Complete Guide to KRW Stablecoin Issuance Structure

[Crypto Asset Issue: KRW Stablecoin & Digital Asset Basic Act]

The issuance entity for the controversial KRW Stablecoin has been narrowed down to a 'Bank-centered Consortium'. It is a compromise where banks hold the majority stake for financial stability, but management participation by tech companies is also open. In this post, we analyze the core content of the government's adjustment plan and the impact of strengthened exchange security regulations (10% revenue penalty) on the market.

KRW Stablecoin: The Partnership Between Banks and Tech Companies Begins

1. Issuance Entity: Bank's 'Stability' + Tech Company's 'Innovation'

The Financial Services Commission (FSC) has decided to allow a Bank-centered (50% stake + 1 share) consortium as the issuance entity for KRW stablecoins. This is interpreted as a measure that prioritizes the stability of the existing financial system.

However, it is not a structure simply monopolized by banks. The government has opened the way for tech companies (e.g., Kakao, Naver, etc.) to become the largest shareholders of the consortium.

• Role of Banks: Ensuring credibility and stability of issuance through majority stake.
• Role of Tech Companies: Leading actual operations and providing platform technology.

In other words, multiple banks will split the shares to exceed 50%, but a single tech company will serve as the largest shareholder to lead innovation, envisioning a model of 'Innovation within Stability'.

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2. Key Adjustments to the Digital Asset Basic Act

The revealed 'Key Adjustment Plan for the Digital Asset Basic Act' contains important regulations that will significantly impact the market, in addition to the issuance entity. I have summarized the key points in a table.

Issue	Government Adjustment Plan (FSC)
Issuance Entity	Bank-centered (50%+1) consortium allowed (However, tech company recognized as largest shareholder)
Agency Cooperation	Not a unanimous consent system, but legislation of a 'Consultative Body of Related Agencies'
Minimum Equity Capital	5 Billion KRW or more (Prescribed by Presidential Decree)
Liability for Hacking	No-fault compensation and introduction of 10% revenue penalty

In particular, the formation of the Consultative Body of Related Agencies is a somewhat relaxed form compared to the 'Consensus Body (Unanimous)' requested by the Bank of Korea. It is interpreted as the financial authorities' will to take the lead in the final decision, although vice-ministerial officials from the FSC, BOK, and MOEF will gather for consultation.

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3. Strengthened Exchange Regulations: 10% Revenue Penalty for Hacking

The most notable part of this adjustment plan regarding investor protection is undoubtedly the introduction of punitive penalties. In the future, if a hacking incident occurs at a virtual asset exchange, the exchange must pay a massive penalty amounting to 10% of its revenue.

• No-fault Liability: Compensation liability imposed regardless of proof of negligence by the exchange.
• Strengthened compared to Financial Firms: Stronger sanctions far exceeding the penalty levels for financial companies under the existing Electronic Financial Transactions Act.

This is a measure to supplement the lack of legal grounds for sanctions despite frequent accidents, such as the recent Upbit hacking case (approx. 40 billion KRW). Now, an environment has been created where exchanges have no choice but to prioritize investment in security.

Note:
While these strong regulations are positive for investor protection, there are concerns that they may act as entry barriers for small and medium-sized exchanges lacking capital, thereby deepening market monopoly.

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4. Future Outlook and Implications

The government's adjustment plan is a signal to speed up 'institutionalization'. The goal is to process the Digital Asset Act within the first quarter, but the opposition party (Democratic Party) opposes the bank majority stake, so difficulties are expected during the National Assembly discussion process.

However, the direction is clear. The KRW Stablecoin will eventually be issued, and the entity will be an alliance between large institutions that can guarantee reliability and Big Tech companies with technological capabilities.

From an investor's perspective, one can expect the expansion of the DeFi ecosystem through stablecoins and a safer exchange environment. However, side effects such as fee increases due to rising regulatory costs should also be watched.

The content of this blog is for reference only for investment judgment, and investment decisions must be made under the individual's judgment and responsibility. Under no circumstances can the information in this blog be used as evidence of legal liability for investment results.