South Korea crypto regulation: stablecoin interest payments to be banned under new 2025 law

**South Korea Bans Stablecoin Interest Payments in Major 2025 Cryptocurrency Regulation Overhaul**

South Korea's Financial Services Commission (FSC) is implementing groundbreaking cryptocurrency regulation that will prohibit interest payments on stablecoins, following similar U.S. regulatory approaches. The comprehensive crypto law, expected to take effect by end of 2025, aims to balance financial stability protection with digital asset innovation.

This regulatory shift significantly impacts the DeFi ecosystem and cryptocurrency market dynamics in South Korea, one of Asia's largest crypto trading hubs. The stablecoin interest ban directly affects yield farming protocols, lending platforms, and blockchain-based financial services that currently offer returns on stablecoin deposits.

The FSC's decision reflects growing global regulatory scrutiny of digital assets, particularly stablecoins' role in the broader financial system. This move could influence Bitcoin and altcoin trading patterns as investors reassess risk-reward ratios in South Korean cryptocurrency markets.

Market participants should monitor implementation details as this regulation may trigger capital flows to alternative DeFi protocols and impact stablecoin adoption rates. The policy represents South Korea's strategic approach to cryptocurrency oversight while maintaining its position as a blockchain innovation leader.