Bank of Korea Governor Rhee Chang-yong has expressed support for the development of a stablecoin pegged to the South Korean won but highlighted concerns regarding foreign exchange management. In a recent press conference, Rhee acknowledged the convenience such a stablecoin could offer in facilitating transactions but cautioned it may complicate the central bank's forex controls by increasing demand for dollar-backed stablecoins.
This endorsement comes alongside legislative efforts by South Korea’s ruling Democratic Party to allow companies with sufficient equity capital to issue stablecoins denominated in won, provided they maintain adequate reserves and obtain regulatory approval from the Financial Services Commission (FSC).
The Bank of Korea’s forex reserves have declined from $415.6 billion in December 2024 to $404.6 billion by May 2025, reflecting tightening economic conditions. Rhee’s remarks also touched on potential impacts on South Korea’s banking industry if payment functions traditionally managed by banks expand into the non-banking sector.
South Korea is exploring a regulatory environment supportive of stablecoin issuance, aligning with trends seen in other Asian financial hubs like Hong Kong and Singapore that are establishing digital asset frameworks to attract fintech innovation. Meanwhile, US dollar-backed stablecoins such as Tether (USDT) and Circle’s USDC dominate the stablecoin market; however, interest is growing in non-dollar pegged tokens like Circle’s euro-based EURC.