The Bank of Korea has reiterated its position that the issuance of won pegged stablecoins should be limited to commercial banks, as lawmakers continue to debate a comprehensive regulatory framework for digital assets. In a formal report submitted to the National Assembly’s Strategy and Finance Committee, the central bank described won stablecoins as currency like substitutes that require strict oversight aligned with monetary policy and financial stability objectives.
According to the central bank, allowing non bank entities to independently issue won backed digital tokens could conflict with South Korea’s longstanding separation between banking and commerce. The Bank of Korea warned that privately issued stablecoins might complicate monetary transmission mechanisms and create vulnerabilities in foreign exchange management if not properly supervised.
The report also highlighted concerns that stablecoins could be used to bypass existing foreign exchange reporting requirements. Cross border transfers conducted through digital tokens may reduce transparency in capital flows, potentially undermining regulatory safeguards. As a result, the central bank argued that commercial banks, which already operate under established capital, governance and compliance frameworks, should be the initial issuers of any domestic currency stablecoin.
Under the proposal, a bank centered consortium model would oversee issuance, with coordination between financial regulators through a statutory interagency body. The Bank of Korea referenced international regulatory approaches, including the United States GENIUS Act framework, which involves shared supervision among the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation. The central bank suggested that a similar multi agency structure could enhance oversight and policy alignment in South Korea.
While the Bank of Korea acknowledged that programmable stablecoins may support digital asset innovation and improve payment efficiency, it emphasized the need for phased implementation. Expansion beyond bank issuers, if permitted, should occur gradually and only after formal risk assessments and regulatory adjustments are completed.
The stance has drawn criticism from segments of the domestic blockchain industry. Sangmin Seo, chair of the Kaia DLT Foundation, argued that restricting issuance to banks lacks sufficient logical grounding and may limit innovation. He suggested that establishing clear and comprehensive rules for all eligible issuers would provide a more balanced approach to managing systemic risk while fostering competition.
Legislative discussions have faced repeated delays. Regulators were divided in late 2025 over whether banks should hold majority stakes in stablecoin issuing entities, postponing a bill initially expected to pass in October. Lawmakers indicated in December that a resolution might be reached in January 2026, but no final timeline has been announced.
The renewed statement from the Bank of Korea underscores the central bank’s cautious approach as South Korea weighs how to integrate won denominated stablecoins into its financial system.
