Bank of Korea Revives Bank-Issued Stablecoin Model

A New Era of Digital Assets Under Banking Supervision The Bank of Korea (BOK) has updated its strategic proposal for a won-backed stablecoin structure to be issued by commercial banks.
This move follows a stagnation in legislative processes at the end of 2023 and aims to establish an institutional oversight mechanism within the digital asset ecosystem.
BOK Governor Rhee Chang-yong and bank officials have highlighted regulatory models in the United States as examples, emphasizing that stablecoins should be managed within the traditional banking system.
The proposed model envisions digital assets being backed by financial institutions under central bank supervision and fully integrated with the existing economic system.
Regulatory Process and Security-Focused Approach Efforts toward stablecoin regulation in South Korea gained momentum particularly after the collapse of Terra/Luna in 2022.
The resulting market volatility prompted regulators to create a stricter and more secure framework.
The BOK's latest initiative aims to minimize risks by providing balance in a market currently dominated by the private sector.
Market Dynamics and Institutional Expectations This development is expected to strengthen the confidence of institutional investors by providing regulatory clarity in the cryptocurrency markets.
With bank-based models coming to the fore, it is anticipated that competitive pressure on local won-based private projects may increase.
Furthermore, the compliance processes of global assets such as Tether (USDT) and USDC in the region are likely to be affected by this new framework.
South Korea's step is seen as part of a vision to create a digital asset infrastructure compatible with international standards.
In the medium term, such regulations are expected to reshape liquidity flows and institutional participation processes in the Asian market.