Thomas Daniels
The Financial Services Commission (FSC) of South Korea is preparing to introduce a comprehensive regulatory framework for stablecoins, with a government-backed bill expected to be submitted to the National Assembly in October. The legislation will focus on setting clear requirements for issuance, collateral management, and internal control systems within the digital asset ecosystem. This initiative marks the second phase of the country’s Virtual Asset User Protection Act and reflects the government’s push to formalize oversight of the rapidly evolving crypto sector.
According to Representative Park Min-kyu of the Democratic Party of Korea, the FSC has already provided policy briefings outlining the direction of the proposed regulations. The legislation aims to provide clear operational standards for service providers while reinforcing protections for digital asset users.
The framework is part of a broader strategy to establish a won-pegged stablecoin, which has gained political and institutional traction following campaign promises from President Lee Jae-myung. Multiple legislative efforts have since emerged, including the Digital Asset Basic Act and separate bills focused on the issuance and circulation of value-stable digital assets.
Support for a national stablecoin is also growing among financial institutions. Major South Korean banks—including KB Kookmin, Shinhan, Woori, and Hana—have announced plans to collaborate on the development of a won-pegged stablecoin, targeting a launch window between late 2025 and early 2026. These efforts are aimed at reducing the nation’s reliance on dollar-denominated stablecoins, which currently represent 99.8% of the $266.7 billion global stablecoin market.
While the move is broadly supported, the Bank of Korea has raised concerns over the implications of allowing non-bank entities to issue such assets, citing potential risks to monetary policy and exchange rate stability. Nevertheless, with roughly 20% of the South Korean population actively trading cryptocurrencies, lawmakers view the introduction of a domestic stablecoin as a strategic necessity to retain capital flows within national borders.
In parallel, South Korean authorities are intensifying efforts to clamp down on tax evasion involving digital assets. Recent enforcement actions in Jeju City have targeted over 3,000 individuals suspected of using cryptocurrencies to conceal taxable income, with investigations focused on recovering approximately $14.2 million in arrears.
The FSC’s upcoming legislation is expected to prioritize full-reserve backing, enforce robust internal controls, and mandate transparent operational structures for issuers, laying the foundation for a secure and regulated environment for won-backed stablecoins.
