South Korea’s Regulatory Tug-of-War Over Stablecoins Intensifies

South Korea's Financial Services Commission (FSC) is advancing a government-backed bill to regulate stablecoins, aiming for submission by 2025. This proposal enters a crowded field—five competing bills from lawmakers are already under review in the National Assembly. The central bank (BOK), which recently published a stablecoin whitepaper, insists issuance should remain bank-dominated to preserve trust, stating "currency functions on trust rather than technology."

The FSC asserts stablecoins fall under VIRTUAL asset jurisdiction, claiming authority over licensing and exchange oversight. Policy analyst Sejin Kim notes most legislative proposals favor private issuer licensing, while the BOK resists, fearing financial instability. Attorney Jeonghwan JK Kim observes none of the bills fully align with either the FSC's or BOK's vision, creating regulatory ambiguity.

President Jae-Myung Lee has separately voiced concerns about South Korean investors' exposure to cryptocurrency volatility, hinting at broader market anxieties. The debate reflects global tensions between innovation and control, with South Korea's kimchi premium phenomenon now extending to stablecoin markets.