South Korea's government has announced a significant shift in its financial market policy, revealing plans to allow 24-hour foreign exchange trading starting in July 2026. This move, announced by Vice Finance Minister Lee Hyoung-il, is a core part of a broader strategy to elevate the country to "developed-market" status, a key goal of President Lee Jae Myung's administration. The reform aims to dramatically improve the accessibility and international demand for the Korean won (KRW).
This initiative follows previous liberalization steps, including allowing foreign companies to trade the won from overseas about two years ago. Historically, trading was restricted to 6.5 hours per day through specific domestic banking networks. The government's roadmap includes creating a new system for offshore won trading, simplifying registration for market participants, and promoting the won's use in cross-border payments and financing.
Concurrently, a separate regulatory battle is delaying the nation's stablecoin legislation. The Bank of Korea (BoK) and the Financial Services Commission (FSC) are at an impasse over who should be allowed to issue won-pegged stablecoins. The BoK insists that only bank-led groups (with banks owning at least 51%) should have issuance rights to ensure financial stability and control. In contrast, the FSC advocates for a more flexible model that would also permit qualified fintech firms and payment apps to issue stablecoins under strict reserve rules.
This deadlock has paused the progression of the country's next major crypto law, with a resolution now expected in Q1 2026. The delay occurs despite substantial local demand, with Chainalysis data showing Korean won-based stablecoin purchases reaching approximately $64 billion in the year through June 2025.
Analysts suggest the regulatory vacuum may inadvertently strengthen the dominance of U.S. dollar-pegged stablecoins like USDT and USDC in the Korean market, as local projects from companies like Toss and major banks remain in limbo. The U.S., with its clear regulatory frameworks like the GENIUS Act, is seen as potentially gaining further ground in the digital currency space while South Korea debates its model.
