[Issue Interview] Fintech Association Chairman Lee Geunju: "Establishing a Digital Asset Agency Is Reasonable"

"Enact a Basic Law to Promote Stablecoins"
On the Proposal to Split the Ministry of Economy and Finance and Disband the Financial Services Commission:
"Minimizing Administrative Vacuums Is Preferable"

Lee Geunju, Chairman of the Korea Fintech Industry Association, has expressed support for the political sector's push to establish a Digital Asset Agency (tentative name) following the 21st presidential election, calling it a reasonable move. He explained that the establishment of such an agency would help clarify the legal definitions and regulations for industries, sectors, and operators related to payment and settlement coins such as stablecoins, by accelerating the legislative process for the Digital Asset Basic Act. He emphasized the need to benchmark countries like the United States, European Union (EU), United Kingdom, Singapore, and Hong Kong, which have already laid the foundation for fostering the industry by preparing basic laws that regulate token issuance, and to prepare relevant legislation as soon as possible.

Lee Geunju, Chairman of the Korea Fintech Industry Association, is giving an interview to Asia Economy on the 27th. Photo by Yoon Dongju

Global Surge in Digital Assets... "Basic Law Must Be Enacted Quickly"

In an interview with Asia Economy on the 27th, Chairman Lee stressed the urgent need to establish a legislative and regulatory framework for stablecoins. He pointed out that while some domestic fintech companies with stablecoin technology are ready to apply it to real financial services such as overseas remittance and settlement, the lack of legal standards forces them to rely on overseas solutions. He also noted that the absence of a basic law covering not only stablecoins but also tokenized securities (STO) and digital asset spot exchange-traded funds (ETF) is hindering the growth of the virtual asset industry.

Chairman Lee identified the United States, EU, United Kingdom, Singapore, and Hong Kong as leading countries in stablecoin administration. Singapore was the first to introduce a stablecoin system, releasing a regulatory report in August 2023 that focuses on regulating "issuance" as a business, while also allowing the circulation of coins that do not comply with regulations. In December last year, Hong Kong prepared a stablecoin bill and announced plans to apply Hong Kong-style regulations to overseas-issued stablecoins. If a coin is pegged to the Hong Kong dollar, it is considered a regulated stablecoin activity. The United States is also expected to introduce the GENIUS Act, led by the Senate, as early as next month, establishing the principle of regulating only US dollar-based stablecoins issued within the United States. Only basic regulations on issuer authorization and reserve assets will be implemented, with other regulations kept to a minimum.

Chairman Lee emphasized that Korea must also enact a basic law as soon as possible. He explained that while the first phase of digital asset legislation has focused somewhat on consumer protection, after the new administration takes office, efforts should shift to enacting a second-phase law focused on industry development. The core of the second-phase law is to introduce a small license system that applies differentiated capital requirements to "MyPayment" operators, who only transmit remittance instructions without holding funds. The proposal also includes easing licensing regulations so that small and medium-sized MyData operators (fintech companies) can transfer funds from a customer's deposit account to another financial institution's account as long as they have been delegated transfer authority by the customer.

Ultimately, he argued that the speed of enacting the Digital Asset Basic Act must be increased. He asserted that establishing a Digital Asset Agency would greatly help both the legislative process and industry development. Chairman Lee stated, "The political sector's proposal to benchmark progressive overseas cases such as the United States and establish a Digital Asset Agency is reasonable," adding, "There was controversy in the United States over whether the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) should be the main authority for virtual assets, and in Korea, it is still unclear whether the Bank of Korea, the Financial Services Commission, or a third institution should be the main authority. However, regardless of this, the establishment of the agency and the enactment of the basic law must be expedited."

Geunju Lee, Chairman of the Korea Fintech Industry Association, is giving an interview to Asia Economy on the 27th. Photo by Dongju Yoon

On Splitting the Ministry of Economy and Finance and Disbanding the Financial Services Commission: "Minimizing Administrative Vacuums Is Key"

Chairman Lee refrained from commenting on whether the government reorganization currently being discussed in political circles would benefit or harm the fintech sector. At present, the Democratic Party is considering a plan to separate the budget function from the Ministry of Economy and Finance to establish a new Budget Office, and to transfer financial policy responsibilities to a new ministry following the disbandment of the Financial Services Commission after the presidential election. Chairman Lee stated that, rather than the reorganization itself?summarized as "splitting the Ministry of Economy and Finance and disbanding the Financial Services Commission"?the fintech industry's main concern is minimizing the resulting administrative vacuum.

He also stated that minimizing gaps during leadership transitions at authorities is another key concern for the fintech sector. Chairman Lee said, "Having worked for 10 years after moving from the first-tier financial sector to fintech, I have learned that who you work with is more important than which ministry or organization is in charge of fintech," adding, "I would like to urge the government to minimize administrative vacuums during organizational restructuring and leadership changes."

Lee Geunju, Chairman of the Korea Fintech Industry Association, is giving an interview to Asia Economy on the 27th. Photo by Yoon Dongju

"Amend the Personal Information Protection Act to Accelerate Innovation in Fintech Sunshine Loans"

Chairman Lee suggested easing regulations on Sunshine Loans so that fintech can better fulfill its fundamental financial role, such as providing loans to ordinary citizens. Specifically, he called for amending the Personal Information Protection Act to lower the barriers for MyData operators to notify consumers about Sunshine Loan applications. Currently, Articles 17 and 18 of the Personal Information Protection Act strictly regulate the use of consumer personal information, allowing it only with third-party consent. Chairman Lee argued that, unless a consumer explicitly refuses, third-party provision and customized services that benefit the consumer should be institutionally permitted.

He stated, "To expand the pool of Sunshine Loan beneficiaries, who are mainly medium- and low-credit individuals, it is urgent to ease regulations under the Personal Information Protection Act," adding, "If MyData operators actively participate in the Sunshine Loan notification business, services such as checking for duplicate loans, streamlining the loan notification process, and providing product comparison recommendations based on individual credit ratings will become more active."

Chairman Lee has experience in both the first-tier financial sector, including the IBK Bank New York branch, and the fintech industry. After serving as the 4th Chairman of the Fintech Industry Association from 2022 to 2023, he was re-elected last year and will serve as the 5th Chairman until February 16 next year. Chairman Lee stated that he does not plan to seek a third term. His goal for the remainder of his term is to make the Electronic Financial Business Operators Council a legally recognized organization. He said, "Next month, we plan to elect a council chairman among the executives of electronic payment gateway (PG) companies," adding, "After the election, I will focus on making the council a legally recognized organization so that the industry's role can be properly communicated to policymakers in the event of crises like the TMON and WEMAKEPRICE incidents that occurred last year."