Regulatory Deadlock Halts South Korea’s Stablecoin Plans Amid Bank Dispute

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South Korea is now unlikely to finish enacting its anticipated regulatory framework for locally issued won-backed stablecoins before 2026. 

This is partly due to a failure to resolve an ongoing dispute between the Bank of Korea (BOK) and other financial regulators over whether banks should dominate stablecoin issuance.

The BOK has argued that any stablecoin issuer approved under the new framework should be majority-owned (≥ 51%) by a consortium of banks. It says this is necessary for financial and foreign-exchange stability, as well as ensuring effective anti-money-laundering (AML) controls, given banks’ previous experience with regulatory oversight. 

Other regulators, however, favor opening issuance to a broader set of industry stakeholders.

South Korea’s National Assembly is currently reviewing three bills addressing stablecoin issuance from both the ruling party and opposition. While each bill requires a minimum capital for issuers of ₩5 billion (approximately US$3.4 million), they diverge on technicalities, such as whether stablecoin issuers may pay interest on holdings.

South Korean pro-crypto president Lee Jae-myung was elected on June 3, 2025, following a snap election, and pledged to a modern regulatory framework for digital assets, including the legalization of crypto ETFs and pension fund investments in digital asset markets. 

South Korea has an active crypto market involving around 18 million citizens, which is more than a third of the country’s population.

With no regulatory consensus, South Korea’s stablecoin framework appears to have stalled.