Thomas Daniels
In a strategic move to solidify its oversight of the digital asset sector, the Bank of Korea (BOK) has established a Virtual Asset Committee tasked with supervising the cryptocurrency market and coordinating policy dialogue on stablecoins and virtual assets with the government. This initiative underscores the central bank’s pivot from observation to active participation in shaping South Korea’s crypto regulatory framework.
A central bank official confirmed that the newly formed Virtual Asset Team will serve as a focal point for intergovernmental cooperation during the legislative process and will monitor industry developments involving stablecoins and digital assets.
From Research to Execution: CBDC Strategy Refocused
Coinciding with the committee launch, the Bank of Korea has renamed its Digital Currency Research Team to the more operationally oriented Digital Currency Team, signaling a transition from academic research to business-driven digital currency development.
The bank has also introduced two specialized divisions:
- Digital Currency Technology Team, focused on research and technology development;
- Digital Currency Infrastructure Team, responsible for building a digital voucher platform using deposit tokens and establishing test environments for digital currency applications.
CBDC Pilot Postponed Amid Regulatory Uncertainty
On June 29, the Bank of Korea postponed its planned retail central bank digital currency (CBDC) pilot, which was scheduled to run from April through June 2025. The decision followed growing concerns from commercial banks over participation costs and a lack of legal clarity.
Despite the delay, central bank officials confirmed that CBDC-related projects will continue and pilot testing may resume once legislative frameworks are clarified.
Banks Prioritize Stablecoins Over CBDC Initiatives
South Korea’s commercial banking sector has accelerated plans to launch won-pegged stablecoins, with eight major institutions targeting issuance by late 2025 or early 2026. This move reflects a broader industry preference for bank-issued digital currencies over state-run CBDCs.
Bank of Korea Deputy Governor Ryoo Sang-dai has publicly supported a phased approach in which licensed banks take the lead on stablecoin issuance before broader market participation is considered.
Legislative Friction Over Stablecoin Issuance
Tensions are emerging between the central bank and lawmakers over proposed legislation that would allow non-bank entities with minimum equity of KRW 500 million (approximately USD 360,000) to issue stablecoins.
The BOK has voiced strong opposition to such provisions, citing historical parallels with the “free banking” era and the potential risks to monetary stability and capital flow management if stablecoin issuance becomes overly decentralized.
