Bank of Korea Urges Bank-Led Won Stablecoins as Bill Stalls

The Bank of Korea has once again called for stablecoins controlled by banks and tied to the won, with an emphasis on financial stability and regulatory oversight given that South Korea’s digital-asset legislation is still stuck in the National Assembly. The central bank’s latest comments highlight growing urgency-around establishing a clear framework for Korean won-pegged stablecoins amid rising global competition in-digital currencies.

Senior Bank of Korea officials reiterated that any issuance of-won-backed stablecoins should be led by licensed commercial banks rather than non-bank fintech-or crypto firms. The central bank argues that a bank-led digital won-stablecoin model would better safeguard monetary policy transmission, prevent systemic risks, and ensure compliance with anti-money laundering standards.

Regulatory Deadlock Slows South Korea Stablecoin Bill

The proposed stablecoin regulatory bill, aimed at defining issuance standards and reserve requirements for won-pegged digital tokens, has faced delays due to political debate over oversight authority and consumer protection measures. Lawmakers remain divided on whether non-bank entities should be permitted to issue stablecoins tied to the Korean won.

The Bank of Korea has consistently expressed concerns that privately issued stablecoins could undermine financial stability if not tightly regulated. Officials warn that large-scale adoption of non-bank stablecoins might weaken banks’ deposit bases and complicate liquidity management.

Why Bank-Led Won Stablecoins Matter

Under the central bank’s preferred model, regulated banks would issue won-backed stablecoins fully collateralized by reserves held in traditional financial institutions. This structure, officials say, would maintain confidence in digital payments while preserving monetary policy effectiveness.

Globally, stablecoins have gained traction as a bridge between traditional finance and decentralized finance markets. However, regulators worldwide have intensified scrutiny following volatility in parts of the crypto sector. South Korea’s cautious stance reflects lessons learned from prior digital asset market disruptions.

Global Competition and Digital Currency Strategy

The Bank of Korea’s renewed call also comes as countries accelerate development of central bank digital currencies and regulated stablecoin frameworks. Policymakers fear that delays in establishing a domestic won stablecoin framework could put South Korea at a competitive disadvantage in cross-border payments and digital finance innovation.

Market analysts note that while legislative progress has slowed, pressure is mounting for regulatory clarity. Financial institutions and blockchain firms are closely watching developments, anticipating clearer rules that would unlock new digital payment products.

For now, the Bank of Korea remains firm: any expansion of won-pegged stablecoins must prioritize financial stability, regulatory transparency, and bank-led oversight. As the stablecoin bill stalls, the debate over South Korea’s digital currency future continues.