BOK Proposes Bank-Only Model to Mitigate Systemic Risk
South Korea's central bank is advocating to keep the issuance of won-pegged stablecoins exclusively within the commercial banking system. In a report submitted to the National Assembly's Strategy and Finance Committee, the Bank of Korea (BOK) labeled these digital assets as "currency-like substitutes" that pose a direct threat to monetary policy, foreign exchange stability, and overall financial integrity. The bank argues that allowing non-bank entities to issue stablecoins could create loopholes for bypassing foreign exchange regulations and violate the country's established principle of separating banking and commerce.
To manage these perceived threats, the BOK proposed a structured approach where banks would lead issuance through a consortium model. This system would be overseen by a new statutory interagency body responsible for coordinating approvals and supervision. The central bank pointed to the United States’ GENIUS Act framework—a cross-agency model involving the Treasury Department, Federal Reserve, and FDIC—as a potential blueprint for its proposed regulatory structure.
Stablecoin Legislation Stalled Since October Over Issuer Control
The BOK's firm stance lands in the middle of a legislative deadlock over a comprehensive stablecoin framework, which was initially expected in October 2025. Lawmakers have been unable to reach a consensus on the central point of contention: whether non-bank entities should be allowed to issue stablecoins and to what extent banks must be involved in any issuing entity. The delay has created uncertainty for crypto firms looking to operate in one of Asia's key digital asset markets.
This bank-centric proposal has drawn criticism from industry participants who argue it stifles innovation. Sangmin Seo, chair of the Kaia DLT Foundation, has pushed back against the BOK's position, stating that the argument for bank-led issuance lacks a solid justification.
The argument for banks leading the stablecoin rollout lacks a “logical foundation.”
— Sangmin Seo, Chair of the Kaia DLT Foundation.
Seo and other industry advocates contend that establishing clear, robust rules for all potential issuers, rather than restricting the market to banks, is a more effective way to minimize risk while fostering a competitive environment.
