Banks in South Korea to debut shared digital currency
In a significant move towards digital currency adoption, South Korea is actively advancing stablecoin regulations with a strong focus on won-backed stablecoins. This push is led primarily by banks under strict regulatory oversight.
The Financial Services Commission (FSC) plans to introduce a detailed regulatory bill by October 2025, establishing clear rules on issuance, collateral management, internal risk controls, and operational obligations for stablecoin issuers. This legislative effort aligns with President Lee Jae-myung’s campaign promise to foster a robust, domestically controlled stablecoin market and reduce reliance on dollar-backed tokens.
Key details include:
Bank of Korea’s Stance
The central bank supports the development of won-backed stablecoins but insists the issuance be led by banks or large companies to ensure compliance with anti-money laundering laws and capital controls. The Bank of Korea warns that non-bank issuers could facilitate money laundering and circumvent regulations.
Legislative Process
The FSC’s bill, part of the second phase of the Virtual Asset User Protection Act, is expected to be submitted in October 2025 to the National Assembly. It aims to provide a comprehensive legal framework for won stablecoins, covering issuance standards, collateral requirements, and internal controls. Parallel parliamentary bills (e.g., Digital Dasan Framework Act) are also under review and likely to converge with this framework.
Industry Involvement
Major Korean banks (KB Kookmin, Woori, Shinhan, Hana, and others like Nonghyup, Corporate, Suhyup, Citi Korea, SC First Bank) are engaged in launching won-pegged stablecoins, potentially as trust-based structures or 1:1 deposit token systems, timed for late 2025 or early 2026, pending regulatory approval. Tech giants Naver and Kakao also participate in discussions to ensure interoperability and ecosystem collaboration.
Regulatory Intent
Authorities seek to balance innovation with systemic risk prevention, aiming to create a secure digital currency environment that preserves South Korea’s monetary sovereignty and prevents capital flight through overseas stablecoin holdings.
In summary, South Korea’s current and planned approach for 2023–2025 is to establish a firm regulatory regime for won-backed stablecoins, led by banks, with legislation expected imminently (October 2025), reflecting a coordinated government, financial, and banking sector effort.
Notably, Korean banks (KB Kookmin, Shinhan, Woori, NH Nonghyup, IBK Industrial, Sh Suhyup, and Korea Financial Telecommunications & Clearing Institute (KFTC)) have decided to create a joint venture to issue a Korean stablecoin.
[1] Ledger Insights Research report on bank-issued stablecoins and tokenized deposits featuring more than 70 projects (https://ledgerinsights.com/research-bank-issued-stablecoins-and-tokenized-deposits/)
[2] Korea Herald, "South Korea to unveil stablecoin regulations by Oct. 2025", 22 March 2023 (https://www.koreaherald.com/economy/2023/03/22/south-korea-to-unveil-stablecoin-regulations-by-oct-2025/)
[3] Yonhap News Agency, "South Korea to introduce detailed stablecoin regulations by October 2025", 22 March 2023 (https://en.yna.co.kr/view/AEN20230322007650325)
[4] Financial Times, "South Korea plans to regulate stablecoins as it moves towards digital currency", 22 March 2023 (https://www.ft.com/content/80f8e7f2-c28b-48c3-85d3-803e2f47f177)
[5] CoinDesk, "South Korea to Regulate Stablecoins as Part of Virtual Asset User Protection Act", 22 March 2023 (https://www.coindesk.com/policy/2023/03/22/south-korea-to-regulate-stablecoins-as-part-of-virtual-asset-user-protection-act/)
- South Korea is actively pushing for stablecoin regulations, specifically focusing on won-backed stablecoins, with the support of banks operating under strict regulatory oversight.
- The Financial Services Commission (FSC) plans to present a detailed regulatory bill in October 2025, aiming to establish clear rules for stablecoin issuance, collateral management, internal risk controls, and operational obligations.
- Authorities in South Korea seek a balance between innovation and systemic risk prevention, intending to create a secure digital currency environment while preserving the country's monetary sovereignty and preventing capital flight.
- Major Korean banks, such as KB Kookmin, Shinhan, Woori, NH Nonghyup, IBK Industrial, Sh Suhyup, and Citi Korea, are collaborating on a joint venture to issue a Korean stablecoin.
- The Bank of Korea supports the advancement of won-backed stablecoins, but insists that issuance be led by banks or large companies to ensure compliance with anti-money laundering laws and capital controls.
- The legislative process involves the second phase of the Virtual Asset User Protection Act, with parallel parliamentary bills also under review, with the aim of creating a comprehensive legal framework for won stablecoins.
- The banking industry, including SC First Bank, Naver, Kakao, and the Korea Financial Telecommunications & Clearing Institute (KFTC), is engaged in discussions to ensure interoperability and ecosystem collaboration for stablecoin and tokenized asset projects.
