South Korean President Lee Jae-myung’s Democratic Party submitted a bill to parliament that would allow qualifying companies to issue stablecoins, Bloomberg reported on Tuesday.
The Digital Asset Basic Act is aimed at improving transparency and encouraging competition in cryptocurrency, Bloomberg said. Companies would be able to issue their own stablecoins provided they have at least 500 million won ($368,000) in equity capital and can guarantee refunds through reserves as well as receiving approval from the Financial Services Commission.
Lee, voted in as president last week, made a number of promises to South Korea’s crypto industry during his election campaign, appealing to the nation’s 15 million crypto investors. Among them, he said the country should support a won-based stablecoin market “to prevent national wealth from leaking overseas,” the Korea Herald reported.
Stablecoins are tokens pegged to the value of a traditional financial asset, such as a fiat currency, with the U.S. dollar being comfortably the most prevalent. Their stability provides a counterweight to the volatility of cryptocurrencies like bitcoin BTC and ether ETH, allowing users to hold capital in digital assets without having to worry about wild swings in price.
The sector, which is dominated by Tether’s USDT, has experienced a surge in interest this year thanks to, among other factors, progress toward regulation of the sector in the U.S.
The strength of the stablecoin sector has been highlighted in the last week by the strong performance of USDC issuer Circle’s stock (CRCL) following its initial public offering (IPO). The shares more than quadrupled during the first three days of trading. In addition, market cap of the sector reached $250 billion for the first time.