South Korea’s Bank-Centric Stablecoin Policy Sparks Innovation Concerns
South Korea's financial regulators have drawn sharp industry criticism with a new policy restricting won-pegged stablecoin issuance exclusively to licensed banks. The Bank of Korea defends the MOVE as necessary for market stability, requiring 1:1 reserve backing under central bank supervision.
Blockchain advocates warn the framework could drive crypto innovation offshore. Kaia DLT Chair Park Sung-jun calls the rules "illogical" for open innovation, while fintech leaders argue the policy unfairly advantages traditional banks over blockchain-native issuers.
The controversy highlights growing tensions between financial authorities and digital asset innovators. Market observers note the policy may inadvertently strengthen offshore stablecoin alternatives if domestic projects relocate development to more permissive jurisdictions.
