South Korea Accelerates Stablecoin Regulation with Bank-Led Focus

Central Bank Reiterates Position on Stablecoin Issuance

South Korea's central bank continues to advocate for a structured approach to stablecoins denominated in the won. In recent submissions to the National Assembly's finance committee, the Bank of Korea (BOK) emphasized that bank-led consortiums should take the lead in issuing these digital assets.

This stance aims to leverage existing banking regulations for better oversight, risk management, and protection of financial stability. The BOK argues that such a model would help maintain control over monetary policy and foreign exchange dynamics.

Legislative Delays and Policy Debates

Progress on South Korea's Digital Asset Basic Act has slowed due to disagreements over issuer eligibility. The government had targeted passage in the first quarter of 2026, but external factors including geopolitical events, elections, and committee reorganizations have pushed timelines back.

Lawmakers from the ruling Democratic Party have proposed integrating stablecoin and tokenized real-world asset regulations under existing financial laws. However, the core issue of whether non-bank entities can participate remains unresolved.

The BOK has maintained its preference for bank involvement to minimize risks, a position that has created divisions among policymakers, traditional financial institutions, and the broader digital asset sector.

Deposit Token Pilots Gain Momentum

While stablecoin legislation stalls, work on deposit tokens — blockchain-based representations of commercial bank deposits — is advancing. The BOK plans to expand practical applications in the second half of 2026, including:

BOK Governor Hyun-Song Shin expressed support for both deposit tokens and central bank digital currencies earlier this year. A related pilot by the Ministry of Economy and Finance focuses on using tokenized deposits for government operations.

Implications for South Korea's Digital Finance Strategy

This dual-track approach reflects a cautious strategy: prioritizing stability through bank involvement for stablecoins while testing tokenized deposit innovations in controlled environments. The framework could position South Korea as a leader in regulated digital asset adoption in Asia.

Observers note that successful implementation may influence how other jurisdictions balance innovation with financial safeguards. The ongoing debates highlight tensions between traditional banking structures and emerging fintech opportunities.

As discussions continue in the National Assembly, the outcome will shape the future of digital assets in one of Asia's major economies. The BOK's emphasis on coordination among regulators suggests a comprehensive oversight model is likely to emerge.