Bank of Korea to take active part in stablecoin regulation
The Bank of Korea (BOK) announced Monday that it will take an active role in crafting South Korea’s forthcoming regulatory framework for stablecoins, citing growing concerns about their impact on monetary and financial stability.
The commitment comes as the government begins drafting the second phase of its crypto legislation, expected to focus on stablecoins and transparency in crypto services, reports The Block.
“Unlike general virtual assets, stablecoins inherently possess characteristics of a payment measure,” the central bank said in a new payment systems report. “If their usage expands, they could … undermine the effectiveness of monetary policies.” The BOK also warned that stablecoins might become a conduit for transmitting crypto market risks into the traditional financial system, disrupting payment infrastructure and weakening financial integrity.
Stablecoins under scrutiny in South Korea’s second crypto bill
The move marks a significant shift for the BOK, which had previously taken a more reserved approach to digital asset regulation. In the new report, the bank stated it will “present its views on the desirable direction of stablecoin regulation from a central bank perspective.” This includes contributing to the second phase of South Korea’s crypto legislation, which follows the Virtual Asset User Protection Act that took effect in July 2024.
This next legislative phase is expected to classify crypto service providers more clearly, enforce stricter transparency standards for token listings, and implement oversight rules specific to stablecoins. The Financial Services Commission is set to begin drafting the bill later this year.
According to the BOK, over 18.25 million South Koreans—more than one-third of the population—held cryptocurrencies as of December 2024. The country’s top five crypto exchanges recorded a daily trading volume of $12.1 billion, underscoring the urgency of regulatory clarity.
Meanwhile, the BOK is also advancing its central bank digital currency (CBDC) trials, with a second testing phase planned for October 2025. The upcoming trial will evaluate peer-to-peer transactions, with participation from banks, retailers, and everyday users.
Recently we wrote that South Korea’s Financial Services Commission (FSC) has escalated its efforts to curb unregistered digital asset operators by ordering the blockage of 14 crypto exchange apps on the Apple Store.
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