The Bank of Korea (BOK) does not oppose the issuance of won-pegged stablecoins but is concerned about the impact on foreign exchange management and the banking system.
Last week, South Korea announced the Basic Bill on Digital Assets, granting significant approval authority for stablecoin issuance to the Financial Services Commission (FSC), instead of the Bank of Korea (BOK), despite BOK's recent efforts to gain the primary supervisory role.
Yesterday, the Democratic Party of South Korea, which recently won the presidential election this month, introduced the Digital Asset Innovation Growth Bill - a supplementary document to the previous law, and adjusting the current legal framework.
Although the new bill is designed to be complementary, there are many overlapping contents, especially regarding stablecoin issuance. One example is the minimum capital requirement for issuers, which has been raised from 500 million won (approximately $360,000) to 1 billion won (approximately $720,000).
At the same time, the bill addresses previous concerns of the Bank of Korea by officially granting BOK a role in supervision. While the primary supervisory responsibility remains with the FSC, BOK has the right to provide opinions on any organization issuing won-pegged stablecoins, and the FSC must comply unless there is a legitimate reason to refuse.
Concerns about foreign exchange policy and banking impact
BOK can request stablecoin data from any issuing organization at any time, as well as request the FSC to conduct inspections when necessary. For small-scale issuers with a total issuance value below 1 billion won in the past 12 months, a lighter regulatory regime will be applied.
When the first bill was announced, Yonhap News described BOK's reaction as "panicked". However, yesterday, Bank of Korea Governor Rhee Chang-yong stated: "I believe won-pegged stablecoins are necessary, and I do not oppose their issuance."
Nevertheless, he still raised clear concerns. According to Nate News, he said: "If won-pegged stablecoins are issued, it will be easy to convert to USD-pegged stablecoins, thereby making foreign exchange management difficult." This concern reflects broader worries about monetary policy governance, in a context where South Korea applies capital controls to manage foreign currency inflows and outflows.
The BOK Governor also expressed deep concerns about the impact on the domestic banking system: "If payment activities are shifted from banks to non-banking institutions, we need to reassess the profitability sustainability of the banking system and changes in business operation structures."
Current news reports mainly discuss won-pegged stablecoins, while USD-pegged stablecoins like USDT continue to circulate freely in South Korea. Recently, Tether announced plans to deploy USDT on the public Kaia blockchain, while Circle (USDC) has met with BOK and the National Assembly, and is expected to meet with the FSC, raising speculation that Circle may be preparing to issue a won-pegged stablecoin in South Korea.
