Bank of Korea Presses Lawmakers to Restrict Won Stablecoin Issuance to Banks

Highlights:

• The central bank wants banks to lead digital token issuance to protect monetary stability.
• Lawmakers have delayed Won stablecoin rules as they debate issuer control and ownership.
• Regulators are reviewing cross-border payment tests as stablecoin usage continues to grow.

The central bank of Korea has urged lawmakers to allow only commercial lenders to issue digital won stablecoins. The Bank of Korea presented this position in a formal report to the National Assembly’s Strategy and Finance Committee. It warned that privately issued tokens could interfere with monetary policy control. The bank also said financial stability risks could rise if oversight weakens.

BANK OF KOREA PUSHES TO LIMIT WON STABLECOINS TO BANKS

The Bank of Korea is urging regulators to restrict won-denominated stablecoin issuance exclusively to licensed commercial banks, citing money laundering and financial stability risks.

This matters because limiting issuance… pic.twitter.com/xVEGTdyUia

— Crypto Town Hall (@Crypto_TownHall) February 23, 2026

The bank defined digital won tokens as the currency-like substitutes of the domestic system. It claimed that these tools might impact liquidity status and transmission of policy. Thus, legislators should have a look at the financial impacts prior to verifying any framework. The bank requested authorities to focus more on stability and innovation objectives.

Moreover, the institution was against independent issuance by non-bank firms in the initial phase. It mentioned that commercial lenders already have capital, governance, and compliance standards. The bank is of the view that lenders are in a position to deal with operational risks better.

The report, however, did not dismiss that other institutions could issue stablecoins in the future. Instead, it recommended a gradual growth after the analysis of systematic risk. The bank suggested a gradual introduction instead of open eligibility.

Won Stablecoin and Foreign Exchange Stability Concerns

The Bank of Korea indicated that any won stablecoin framework should focus on foreign exchange stability. Authorities cautioned that electronic currencies would allow quick cross-border flows. This means that not all transactions will be reported through the current reporting systems. Such a possibility may complicate the monitoring of the capital flow.

In addition, the bank expressed issues regarding evading foreign exchange laws. It indicated that digital instruments could fall outside traditional banking processes. Thus, regulators need to establish oversight mechanisms that mirror the activity of onchain settlement.

Legislators are yet to agree on who is to be considered an eligible issuer. Several policymakers are advocating for majority lender ownership of issuing entities. Some suggest that more people could be involved by having clear regulatory standards. These disputes have prevented a stablecoin bill, which lawmakers had hoped to pass in October of last year. The authorities said in December that they would resolve the issue in January.

South Korea's KRW stablecoin framework is experiencing major delay.

Reason? Clash over who should be allowed to issue stablecoins.

The BOK insists issuance should center around local banks, while FSC supports the participation of tech companies. pic.twitter.com/LsDtyX8u4z

— Danny Kunwoong Park (@ParkKunwoong) December 30, 2025

The recent market action has intensified the discussion. BC Card completed a pilot that entailed testing the stability of payments made using foreign-held wallets at local merchants. Moreover, large financial entities and technology companies are developing a domestic stablecoin system as they anticipate the approval of the bill.

Proposed Safeguards and Regional Regulatory Comparisons

The Bank of Korea acknowledged that programmable tokens can support digital payment efficiency. The bank said digital tools may modernize certain settlement processes. Even so, it proposed that the government put up structural safeguards before it deploys on a large scale.

One proposal involves a lender-centered consortium model. Under this structure, regulated institutions would jointly manage issuance and supervision. This arrangement would keep oversight within the already established financial entities. The bank also suggested forming a statutory interagency policy body to coordinate the approvals and regulatory standards.

Officials referenced the United States GENIUS Act framework as an example of cross-agency supervision. That model involves coordination among multiple financial authorities. The Bank of Korea indicated that similar cooperation could strengthen domestic oversight. In the meantime, the central bank of Korea has also recently established a Virtual Asset Division within its Financial Payment Systems Bureau to oversee crypto market risk.