US and South Korea Advance Stablecoin Legislation

The U.S. Senate has advanced the GENIUS Act, a bipartisan bill to regulate stablecoins by anchoring them to the U.S. dollar or short-term treasuries, mandating annual audits for large issuers, and establishing anti-money laundering and consumer protection standards, with President Trump advocating for swift enactment. In parallel, South Korea’s newly elected president Lee Jae-myung and the ruling Democratic Party have proposed the Digital Asset Basic Act to allow qualified local companies to issue won-backed stablecoins under specific capital, reserve, and regulatory requirements. Both legislative efforts aim to reinforce national oversight of stablecoins in response to explosive growth in the sector, with U.S.-issued stablecoins accounting for 96% of the $247 billion global market and South Korean stablecoin trading reaching $42 billion in Q1 2024. The South Korean bill also proposes a presidential committee to oversee the digital asset sector, seeking to boost transparency, competition, and innovation. However, both initiatives face opposition from central banks concerned about the potential impact of non-bank stablecoins on monetary policy and systemic risk. The simultaneous policy moves reflect intensifying international competition and regulatory convergence in digital asset markets.