The Bank of Korea (BOK) is signaling cautious support for the introduction of stablecoins, with Deputy Governor Ryoo Sangdai advocating for regulated commercial banks to serve as the initial issuers of a potential won-denominated digital asset.
Speaking at a press conference on Tuesday, Ryoo emphasized the importance of establishing a solid regulatory framework to mitigate potential risks. “It would be desirable to initially allow stablecoin issuance primarily through banks, which are subject to higher levels of financial regulation, and gradually expand it to the non-banking sector,” he stated. “The aim is to establish a safety net, considering the potential for market disruption or consumer harm.”
Featured News Headlines
Persistent Concerns Over Capital Outflows and Monetary Policy
Despite this cautious endorsement, the central bank remains concerned about the broader implications of stablecoin adoption. Ryoo warned that the introduction of stablecoins could accelerate capital outflows and potentially challenge South Korea’s longstanding approach to foreign exchange liberalization and the internationalization of the Korean won. He also highlighted the need to assess the impact on financial sector restructuring, including discussions around the possible emergence of narrow banking models.
Bank of Korea Governor Rhee Chang-yong, in a separate press conference on June 18, expressed similar reservations. While not outright opposing the concept of a won-based stablecoin, Rhee underscored the complexities involved in managing the foreign exchange aspects of such tokens.
Legislative Efforts to Pave the Way
The regulatory landscape in South Korea is evolving. On June 10, President Lee Jae-myung’s ruling Democratic Party introduced the Digital Asset Basic Act. The proposed legislation would permit companies with a minimum equity capital of approximately $368,000 to issue stablecoins, setting a clear financial threshold for market participation.
CBDC Development Continues as a ‘Countermeasure’
In parallel with stablecoin discussions, the BOK continues to advance its central bank digital currency (CBDC) initiative, viewing it as a strategic counterbalance to privately issued stablecoins. According to Chosun Daily, Ryoo reiterated the central bank’s commitment to the CBDC pilot program, which is being conducted in coordination with the Financial Services Commission and the Financial Supervisory Service. The first phase of testing is scheduled to conclude on June 30.
“However, since the government’s position on stablecoins is not clearly established and there is significant uncertainty regarding related laws and policies, the timing for operating the second pilot test will be determined through consultation with banks,” Ryoo added.
Global Stablecoin Adoption Accelerates
South Korea’s cautious approach contrasts with rapid developments elsewhere. On June 19, Bloomberg reported that Visa has partnered with African stablecoin payments firm Yellow Card Financial to boost adoption across the continent. Meanwhile, in April, Russia’s finance ministry proposed developing a government-backed stablecoin, and three major Abu Dhabi institutions announced plans to issue a new dirham-pegged stablecoin.
As countries worldwide explore stablecoin frameworks, South Korea’s measured strategy reflects its effort to balance innovation with financial stability.
