South Korea Seeks to Prevent Capital Outflow by Regulating Stablecoins Pegged to the Won

The Democratic Party, which currently governs South Korea, has set up a Digital Asset Task Force to create thorough regulations for stablecoins and other digital assets. This move, announced in September 2025, is intended to address rising worries about capital outflows and the stability of the financial system. The party aims to pass new laws during both the regular and year-end National Assembly sessions, focusing on rules for the creation, distribution, and management of digital assets. Led by Representative Lee Jung-moon, the task force stresses that South Korea should “take the lead” in the global “blockchain and digital asset boom” rather than fall behind South Korea's Ruling Party Task Force Aims at Crypto, Stablecoin Oversight [ 1 ]. The urgency is highlighted by statistics showing $40.6 billion in digital assets moved overseas in the first quarter of 2025, with stablecoins such as

The task force’s approach involves developing a stablecoin policy based on the Korean won to counteract the dominance of U.S. dollar-backed stablecoins, and working closely with organizations like the Financial Services Commission (FSC), the Financial Supervisory Service, and the Bank of Korea. To gather input from all stakeholders, public hearings will be organized with cryptocurrency exchanges and fintech firms South Korea's Ruling Party Task Force Aims at Crypto, Stablecoin Oversight [ 1 ]. The Democratic Party is also facing rivalry from the People Power Party, which put forward its own stablecoin bill in July, leading to differing priorities in parliament. Despite ongoing debates, both parties generally agree on passing new regulations by the end of the year South Korea's Ruling Party Task Force Aims at Crypto, Stablecoin Oversight [ 1 ].

Momentum is building in South Korea’s stablecoin market, with regulated won-pegged tokens like KRW1 (issued by BDACS through Woori Bank) and Kakao’s KRWGlobal/KRWKaia trademarks pointing to a trend toward domestically anchored digital assets. Peter Chung from Presto Labs has pointed out that the legislation should prioritize consumer safeguards, including rules for asset custody, transparency requirements, and insurance protections South Korea's Ruling Party Task Force Aims at Crypto, Stablecoin Oversight [ 1 ]. Experts expect the new rules to favor “innovation sandboxes” that encourage experimentation, rather than strict regulatory controls, in line with the government’s growth-oriented policies South Korea's Ruling Party Task Force Aims at Crypto, Stablecoin Oversight [ 1 ].

The Democratic Party’s plan features a Digital Asset Basic Act, submitted in June 2025, which would require issuers of won-backed stablecoins to obtain licenses and maintain a minimum capital of 500 million won. The proposed law also expands the definition of digital assets and gives the FSC the authority to investigate and penalize unfair trading practices South Korea Unveils Comprehensive Digital Asset Regulation [ 3 ]. Although the Bank of Korea remains cautious about the impact of private stablecoins on monetary policy, the new legislation is designed to meet global standards and even surpasses frameworks like the U.S. GENIUS Act South Korea Unveils Comprehensive Digital Asset Regulation [ 3 ]. The task force’s work aims to make South Korea a frontrunner in digital asset regulation, balancing progress with investor security South Korea’s Bold Leap into Digital Asset Regulation [ 4 ].

Key hurdles include managing the complexities of different stablecoin structures and reducing systemic risks. The task force must create adaptable regulations that can keep up with technological changes while remaining flexible. International cooperation will also be essential to align standards and prevent regulatory loopholes South Korea’s Bold Leap into Digital Asset Regulation [ 4 ]. As institutional interest in