South Korea is moving forward on two interconnected fronts: enabling public institutions to use blockchain-based digital currency for operating expenses, and advancing second-stage crypto legislation with a focus on stablecoin oversight.
On September 21, South Korea’s Ministry of Science and ICT approved nine regulatory sandbox exemptions for new technologies and services following a written review by the 45th ICT Regulatory Sandbox Committee. Under the new regulation, public institutions will be able to pay for certain operating expenses, including promotional and similar expenditures made by employees during official duties, using blockchain-based digital currency. Payments can be made with physical cards or through QR codes via smartphones, expanding digital payment methods in public spending.
A key feature is that reconciliation processes will be completed simultaneously with the payment itself. This removes the traditional separation between payment and subsequent settlement, potentially allowing faster transaction processing. However, details regarding which digital currencies will be used and the initial scale of implementation have not yet been disclosed.
In parallel, the Financial Services Commission expects the Digital Asset Framework Act to reach a National Assembly bill review subcommittee in November. Seo Na-yoon, head of the FSC’s virtual asset division, rejected claims that work on the legislation has been delayed. Speaking at a National Assembly seminar in Seoul on September 22, Seo said the government and lawmakers share the same direction on digital asset issuance and distribution, including stablecoins. Ten digital asset and stablecoin bills are currently pending in the National Assembly.
Stablecoin regulation remains central to the framework. The Bank of Korea has supported a bank-led structure for won-denominated stablecoins, citing implications for monetary policy, payments, and financial stability. South Korea’s policy roadmap for the second half of 2026 also includes crypto ETFs, tokenized government bonds, and a legal framework for cross-border stablecoin transactions.
Lawmakers are also watching the United States, where the GENIUS Act is set to take effect on January 18, 2027. Democratic Party lawmaker Min Byung-duk warned that many stablecoin projects being prepared in the U.S. could enter the South Korean market, reinforcing the need for domestic legislation to be completed in time.
