The Bank of Korea (BOK) has formally urged regulators to restrict the issuance of Korean won-denominated stablecoins to licensed commercial banks only. The central bank's proposal, aimed at mitigating financial stability risks and preventing money laundering, could significantly reshape South Korea's digital asset market.
The BOK's primary concerns center on the potential for non-bank entities to issue stablecoins without strong supervision, which could increase exposure to money laundering, fraud, and liquidity risks. Officials warned that a sudden loss of trust in a won-pegged stablecoin could trigger panic redemptions, potentially disrupting both the crypto market and the traditional financial system. By limiting issuance to established banks—which are already subject to strict capital, risk management, and anti-money laundering (AML) compliance standards—authorities believe they can ensure stronger governance and transparency.
The announcement comes amid heightened regulatory scrutiny following a recent incident involving the exchange Bithumb, which mistakenly transferred $40 billion worth of "ghost" Bitcoin to clients in February 2026. While corrected, the error intensified calls for tighter oversight.
The proposal is part of the ongoing debate around Phase 2 of South Korea's Digital Asset Basic Act. While the Financial Services Commission has expressed concerns that overly restrictive rules could stifle fintech innovation, the BOK is prioritizing systemic safeguards. A potential compromise under discussion is a consortium model requiring banks to hold at least 51% equity in any stablecoin-issuing entity. Proposed rules would also mandate 100% reserve backing in high-quality liquid assets like bank deposits or government bonds to guarantee redemptions at par.
The move aligns with broader political priorities, including President Lee Jae-myung's emphasis on safeguarding monetary sovereignty as USD-based stablecoins dominate globally. Concurrently, the BOK is advancing pilot programs for a central bank digital currency (CBDC). Major institutions like KB Kookmin Bank, Shinhan Bank, and Woori Bank are reportedly preparing for possible stablecoin launches as early as late 2026, pending regulatory clarity.
South Korea's proposed bank-led model is more conservative than frameworks in other major jurisdictions. Japan allows licensed trust companies and certain non-banks to issue stablecoins, while the European Union's Markets in Crypto-Assets (MiCA) regulation harmonizes oversight across member states, though both also require full reserve backing.
