South Korea’s central bank has renewed its call for a bank-led model in the issuance of Korean won pegged stablecoins, warning that privately issued digital tokens could pose risks to monetary policy and financial stability. In a report submitted to the National Assembly’s Strategy and Finance Committee, the Bank of Korea (BOK) described won based stablecoins as “currency-like substitutes” that require careful regulatory oversight.
Won Stablecoin Regulation and Financial Stability Concerns
The BOK emphasized that stablecoins could potentially bypass foreign exchange controls and reporting requirements if issued outside the traditional banking system. It argued that commercial banks, already subject to strict capital, governance and compliance standards, should take the lead in issuance. Any expansion to non-bank entities, the central bank suggested, should occur gradually and only after comprehensive risk assessments.
Lawmakers are currently debating a delayed stablecoin framework, with disagreements centered on issuer eligibility and the extent of bank involvement. Regulators have yet to finalize whether banks should maintain majority control in issuing entities.
Proposed Safeguards and Global Policy Comparisons
The central bank also proposed structural safeguards, including a bank centered consortium model and a statutory interagency body to coordinate approvals and supervision. Officials pointed to the United States’ GENIUS Act as an example of cross agency oversight.
Despite ongoing discussions, a clear legislative timeline for Korea’s stablecoin framework has not been confirmed.
Disclaimer
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