Bank of Korea Pushes for Legal Control Over Won-Based Stablecoins Amid Policy Concerns

According to a senior official at the Bank of Korea (BOK), monetary authorities must be involved from the outset if stablecoins backed by the local currency are to be introduced. The official warned that treating such digital assets as equivalent to legal tender could complicate monetary operations, potentially undermining the central bank’s role in maintaining financial stability.

“If won-based stablecoins are used like legal currency, it would necessitate the Bank of Korea’s approval authority,”

the official stated, citing examples from other jurisdictions like the United States, where the Federal Reserve plays a key role in related legislation.

Kh Kyung-chul, head of the BOK’s electronic finance division, reinforced this stance, saying stablecoins could affect the central bank’s ability to execute monetary policy, supervise the financial system, and regulate payment infrastructure. He emphasized that the BOK must have “substantial legal authority” in the authorization process for entities seeking to issue such coins.

The issue comes into sharper focus amid new data revealing the dominance of dollar-based stablecoins in South Korea’s crypto market. Democratic Party lawmaker Min Byung-duk recently disclosed that nearly half of all crypto assets transferred overseas in the first quarter of 2025 were in stablecoins like Tether (USDT) and USD Coin (USDC). 

The Financial Supervisory Service reported that out of 56.8 trillion won (approx. $40.6 billion) moved abroad through major exchanges — including Upbit, Bithumb, Coinone, Cobbit, and Gopax — nearly 47.3% was in stablecoins.

In recent development, South Korea’s Democratic Party leader and presidential frontrunner, Lee Jae-myung, has vowed to legalize spot cryptocurrency exchange-traded funds (ETFs) and introduce a range of crypto-friendly policies if elected in the upcoming June 3 presidential race. 

The BOK’s call for regulatory oversight underscores growing concerns among policymakers that if left unchecked, stablecoins could interfere with national monetary tools and cross-border capital flows. 

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