South Korea’s FSC BANS Stablecoin Interest Payments – What’s Next? 🚨

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South Korea’s FSC, ever the diligent student of American regulations, has decided to copy their moves-this time banning interest payments on stablecoins like a grumpy librarian confiscating candy from children. 🍬🚫

FSC To Prohibit Interest Payments on Stablecoins

On Monday, Yonhap News reported that FSC Chairman Lee Eun-won, a man who clearly enjoys being the party pooper of digital finance, declared that “interest payments on stablecoins must be blocked in any form.” Imagine a world where your crypto earns zero rewards-how dare it!

During a National Assembly’s Government Affairs Committee audit, Lee emphasized that interest payments on KRW-pegged tokens are “as welcome as a tick in a sock.” 🦠 Following a question from PPP lawmaker Yoo Young-ha, who probably just wanted a snack, the FSC’s stance was cemented.

In July, South Korea’s political rivals duked it out over two bills for regulating won-pegged tokens. One allowed interest payments (to entice users abroad), while the other banned them (to prevent market chaos). It’s like a toddler arguing over who gets the last cookie. 🍪

The PPP’s bill, a masterclass in “let’s all get rich quick,” would let interest payments incentivize foreign use of tokens. Meanwhile, the DPK’s bill, a staunch defender of order, banned them to “prevent market disruption.” Who’s more dramatic? The FSC, obviously. 🎭

Some industry folks, ever the rebels, argued that South Korea could design its own system instead of copying the U.S. But the FSC, ever the copycat, said, “Nope, we’ll just do what the Americans say!” 🤡

The GENIUS Act, a document so convoluted it could make a mathematician weep, bans interest payments on stablecoins. But critics say it’s riddled with loopholes-like letting exchanges give rewards instead. It’s the digital equivalent of a “no pets” sign that secretly allows cats. 🐱🚫

In August, U.S. banking associations sent a joint letter to Congress, begging them to fix the GENIUS Act. They claimed interest payments “distort market dynamics” and suggested banning them for exchanges too. It’s like telling a kid not to eat the cake, then wondering why they’re sneaking it. 🍰

Second Phase Of Regulation Coming This Year

While discussing forming a bank-led consortium (because nothing says “innovation” like banks controlling everything), the FSC chairman declared, “We must ensure global consistency… but also keep things stable.” It’s a balancing act as delicate as a tightrope walker with a coffee in one hand. ☕

Chairman Lee confirmed the FSC will submit the second phase of the Virtual Asset User Protection Act this year. Bitcoinist reports it might arrive in Q4, but lawmakers are already itching to pass it. It’s like a toddler begging for dessert-“Just one more minute!” 🍦

The FSC, which has been working on digital asset legislation for over a year, established the Virtual Asset Committee last November. Their goal? Finalize it by 2025. Because who doesn’t want a regulatory framework that’s just in time for the next ice age? ❄️

The second phase includes rules on stablecoin distribution, continuing the FSC’s quest to align with global standards. Because nothing says “global citizen” like micromanaging crypto. 🌍

“We’re in the initial stage of designing the system,” Lee said, “and we know safeguards are important.” It’s like building a house but first checking if the bricks are just the right shade of beige. 🏗️

He also mentioned expanding stablecoin utility, linking them to overseas trading and remittances. “We’ll proceed with the law as it stands,” he added, “while preparing the enforcement decree… just in case.” It’s the digital equivalent of having a backup plan for your backup plan. 🧩

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2025-10-21 07:15