Key takeaways
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Korea’s crypto bill is stalled over stablecoin issuer rules.
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The central bank wants banks to remain in control, often framed as a “51%” threshold.
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Regulators and lawmakers fear a bank-only model would limit competition.
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Firms are lining up, with Toss planning a won-backed stablecoin once rules are finalized.
South Korea’s next major crypto law is being held up by a seemingly simple question: Who gets to issue a won-backed stablecoin?
The proposed Digital Asset Basic Act has slowed as regulators clash over whether stablecoins should be treated as bank-like money or as a licensed digital-asset product.
At the center is the Bank of Korea’s push for a “banks-first” model, ideally through bank-led consortia with at least 51% bank ownership, arguing that stablecoins could, in their view, spill over into monetary policy, capital flows and financial stability if they scale too quickly.
The Financial Services Commission and lawmakers, meanwhile, are wary that a bank-dominated regime could materially limit competition and slow innovation.
The standoff is now expected to push the bill into 2026.
Why Korea cares about won-stablecoins
Stablecoins in South Korea are already important to local traders who move value into crypto markets, often via dollar-pegged tokens to access offshore liquidity. If stablecoin use scales, it could amplify cross-border flows and complicate foreign-exchange management, especially in a market where crypto participation and retail exposure are unusually high.
That is why the Bank of Korea continues to frame issuer rules as a “financial stability” decision. Officials argue that a cautious, staged rollout, starting with tightly regulated banks, reduces the risk of sudden outflows or a loss of control over how “private money” circulates.
At the same time, policymakers who want more companies to be allowed to issue won-backed stablecoins view the issue as one of competitiveness. If Korea does not build a trusted local option, users will continue to rely on foreign stablecoins, leaving the country with less regulatory visibility and fewer opportunities to grow a domestic stablecoin industry.
Did you know? In the 12 months through June 2025, stablecoin purchases denominated in Korean won totaled about $64 billion in South Korea, according to Chainalysis.
The regulatory backdrop
South Korea’s first major crypto regulatory act was the Act on the Protection of Virtual Asset Users. It is built around market safety, including the segregation and custody of customer funds, with banks designated as custodians for user deposits. The framework also mandates cold-wallet storage, criminal penalties for unfair trading and insurance or reserve requirements to cover hacks and system failures.
However, that “phase 1” framework is mainly focused on how exchanges and service providers protect users. The unresolved dispute lies in the next step, the proposed Digital Asset Basic Act, where lawmakers and regulators aim to define stablecoin issuance, supervision and issuer eligibility.
This is precisely where the bill is bogging down. When Korea tries to answer the question of who can issue stablecoins, the Bank of Korea and the financial regulator diverge.
Did you know? South Korea’s crypto rules require licensed service providers to keep at least 80% of customer assets in offline cold wallets to protect against hacks and theft.
Three institutions, three incentives
South Korea’s stablecoin standoff is ultimately a dispute over which institution should have primary responsibility when private money becomes systemically important.
The Bank of Korea is approaching won-backed stablecoins as a potential extension of the payments system and, therefore, as a monetary policy and financial stability issue. Its senior leadership has argued for a gradual rollout that begins with tightly regulated commercial banks and only later expands to the broader financial sector to reduce the risk of disruptive capital flows and knock-on effects during periods of market stress.
The Financial Services Commission views the same product as a regulated financial innovation that can be supervised through licensing, disclosure, reserve standards and ongoing enforcement, without hard-wiring the market to banks as the default winners.
That is why the FSC has pushed back against the idea that issuer eligibility should be determined mainly by ownership structure and why leaked and proposed approaches have reportedly examined multiple models rather than treating bank control as the only safe option.
Then there are lawmakers and party task forces, who are weighing political promises, industry pressure and the optics of competitiveness.
Some proposals have contemplated relatively low capital thresholds for issuers, which the central bank has described as increasing instability risks. Others argue that a bank-first regime could simply delay product market fit and push activity toward offshore dollar stablecoins.
Even the “51%…
cointelegraph.com