South Korea’s Won Stablecoin Law Hits Regulatory Roadblock as Central Bank Clash Intensifies

South Korea's push to legitimize won-pegged stablecoins just hit a bureaucratic wall—and the central bank is holding the bricks.

Regulatory Tug-of-War

The country's financial authorities have pumped the brakes on proposed legislation that would create a legal framework for Korean won stablecoins. Why? A fundamental clash with the Bank of Korea over who gets to call the shots in the future of digital currency. The central bank views stablecoins as potential threats to monetary sovereignty and financial stability, arguing they could circumvent traditional banking channels. Financial Services Commission (FSA) officials, meanwhile, see regulated stablecoins as an inevitable step toward modernizing payment systems and fostering fintech innovation.

The Stakes for Crypto's Future

This delay isn't just procedural—it's a signal. South Korea is one of the world's most crypto-engaged markets, and its regulatory path is watched globally. A clear legal framework for won stablecoins could unlock billions in institutional capital and pave the way for seamless blockchain-based settlements. Without it, the market remains in a gray zone, where innovation is stifled by regulatory uncertainty. The standoff highlights a global tension: financial watchdogs trying to control a technology built to bypass gatekeepers.

What Comes Next?

The legislative timeline is now in flux. Observers expect heated negotiations behind closed doors as both sides maneuver for control. The FSA likely needs to draft significant concessions to the central bank's concerns—think stricter reserve requirements, issuance caps, or even a central bank digital currency (CBDC) pilot taking precedence. Meanwhile, local crypto exchanges and fintech firms are left in limbo, forced to watch from the sidelines as traditional finance argues over the future of money—a classic case of regulators moving at the speed of government while technology moves at the speed of light.

In the end, this clash is less about technology and more about turf. Because in finance, the only thing more predictable than market cycles is an institution fighting to protect its monopoly—even if that means slowing down the future to a crawl.

Governance Dispute Between FSC and Bank of Korea

The primary cause of the delay is abetween the FSC and the central bank.

Thehas taken a firm stance that won-based stablecoins should operate under a bank-led ecosystem to safeguard financial stability and preserve the effectiveness of monetary policy. Specifically, the BOK is calling for domestic banks to hold ain any stablecoin issuer.

In addition, the central bank argues it should haveand the authority to conduct inspections of issuers.

The FSC, however, opposes a strictly bank-led consortium model. It has pointed out that there arefor bank-dominated stablecoin issuance, noting that in the, fintech companies instead of banks are typically the primary issuers.

Market Impact and Legislative Outlook

Regulatory uncertainty is already influencing the market. In the, nearlyin South Korea were related to stablecoins or digital payments.

Shares of companies such asandhave risen sharply, reflecting investor expectations that regulatory clarity will unlock new growth opportunities.

However, policymakers remain divided. Overly lenient rules could introduce systemic risks, while excessive restrictions may stifle innovation.

Big Tech participation is another point of contention. The BOK has proposed limiting the role of large technology firms, while the Democratic Party’s proposedwould allow companies with capital of justto enter the stablecoin market. Critics warn that such a low threshold may be insufficient to ensure adequate safeguards.

Meanwhile, traditional financial institutions are moving forward.have announced ato develop a won-based stablecoin, aiming to retain leadership in the country’s digital payments infrastructure.

The ruling party has pledged to submit the legislation by, and the FSC is expected to publish its proposal by late December or early next month.

While the BOK is reportedly open to a compromise, limiting issuance to consortiums in which domestic banks hold at least 51% ownership, and the FSC has not publicly endorsed this model.

The outcome of this regulatory debate is expected to shapeand could have broader implications for, with market participants also watching for potential spillover effects onand the.

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