South Korea’s stablecoin framework may face further delays as regulators remain divided on key structural issues.

According to local media, top financial institutions, lawmakers, and other industry participants are currently debating the role of banks versus tech companies in issuing Korean won-pegged stablecoins, leading to a delay in a framework that was initially expected to arrive by late 2025.

The Bank of Korea (BOK) argues that banks should hold at least a 51% stake in any stablecoin issuer seeking regulatory approval, a position grounded in concerns over financial stability and the precedent of banking regulations.

Banks, which are already “under regulatory oversight” and have experience with anti-money laundering protocols, are “best positioned to serve as majority shareholders in stablecoin issuers,” a BOK official told local media.

South Korean stablecoin regulations face hiccups

The Financial Services Commission (FSC) was expected to introduce a finalised framework by October this year, and regulators are currently reviewing three separate bills introduced by lawmakers from both the ruling Democratic Party and the opposition People Power Party.

However, those bills also remain stalled due to disagreements over key provisions, including whether stablecoin issuers should be allowed to offer interest on token holdings.

At the same time, the BOK is actively pushing for banks to play a leading role in the ecosystem, expressing concerns that giving non-bank institutions too much control over the stablecoin market could undermine financial regulations and potentially destabilise monetary oversight. 

The central bank has warned that, in effect, stablecoins operate like deposit-taking instruments.

In a recent study, the BOK flagged this concern, warning that “allowing non-bank companies to issue stablecoins is essentially equivalent to permitting them to engage in narrow banking — simultaneously issuing currency and providing payment services.”

The central bank also noted that stablecoin issuance by technology firms could pose monopoly risks, especially if such issuers integrate payment services directly into their ecosystems.

On the other side of the debate, financial authorities are concerned that over-reliance on bank involvement may deter innovation and reduce participation from tech firms that have already built the necessary infrastructure for stablecoin operations.

The BOK has additionally suggested the creation of an interagency council to coordinate stablecoin policymaking through unanimous voting, but this proposal has met resistance from regulators, who cite a lack of precedent or legal justification for such a decision-making structure.

As such, South Korea’s stablecoin regulation currently remains in a state of limbo, even as the private sector has already begun preparing for eventual implementation.

Stablecoin race heats up

South Korea’s top financial holding companies are racing to establish stablecoin infrastructure, as reported by The Korea Times earlier this month.

Notably, four of the country’s largest financial institutions, KB Financial Group, Shinhan Financial Group, Hana Financial Group, and Woori Financial Group, have initiated partnerships with major technology companies such as Naver, Kakao, and Samsung Electronics.

Over the past few months, a number of won-pegged stablecoins have been launched in the country by firms like BDACS and t’order, mostly as the market has shown a clear appetite for real-world digital settlement tools, even in the absence of finalized regulations.

Major banks in the country have also taken steps to stay ahead of the curve.

In June, they formed a consortium to explore issuing their own KRW-pegged stablecoins by 2026..

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