South Korea’s stablecoin debate has entered a more confrontational stage, with the key dispute centered on who should be allowed to issue won-pegged tokens. The Bank of Korea has renewed its call to limit issuance rights to commercial banks, arguing that privately issued stablecoins could affect liquidity conditions and weaken monetary policy transmission.
Central bank treats won stablecoins as currency-like instruments
In a report submitted to the National Assembly Strategy and Finance Committee, the central bank said won-backed stablecoins should not be viewed only as a new tech product. It described them as currency-like substitutes that could carry implications for FX stability, financial risk, and regulatory oversight. From the bank’s perspective, a legal framework cannot focus only on industrial innovation while leaving macro safeguards for later.
The report also warned that stablecoins could let users bypass existing foreign exchange reporting requirements. That point sits near the center of the debate. If cross-border transfers move through digital tokens, regulators may face weaker visibility into capital flows and less transparency in currency markets.
Bank-first model remains the preferred policy route
The Bank of Korea said commercial banks already operate under strict rules on capital, governance, and compliance, which gives authorities an established channel for supervision. On that basis, it argued that banks should lead any initial rollout of won stablecoins. If issuance is expanded beyond banks at a later stage, the process should move gradually and only after broad risk assessments.
On structure, the central bank floated a bank-centered consortium model and proposed a statutory interagency body to coordinate supervision across regulators. The report also pointed to the United States GENIUS Act framework as a reference, noting the coordination role of the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation.
Lawmakers and industry remain split on issuer eligibility
Parliament is still reviewing the delayed stablecoin bill, and disagreement over issuer eligibility is slowing progress. Industry representatives have challenged the bank-first approach. Sangmin Seo, chair of the Kaia DLT Foundation, said the argument lacks a logical foundation, adding that clearer licensing standards could reduce risks without restricting competition.
Supporters of a broader framework say programmable stablecoins could improve payment efficiency and support tokenized assets. The central bank is holding its line: regulatory clarity must come before expansion. How the final bill defines issuer eligibility will shape the way South Korea brings stablecoins into its financial system.